In one of the world’s best blends of economics, politics, and history, the scholarly exploits of Daron Acemoglu and James Robinson on “Why Nations Fail” calls for a sobering reflection for any policy and political leader with any sense of decency. In their classic, they explore the trajectory of societies and nations across the world over several centuries to explain the disparities between wealth and poverty in the world.
For instance and based on their account, Venice enjoyed great economic prosperity after independence in AD 810 because of its highly inclusive political institutions. However, this collapsed in 1171 after the rise of Aristocracy at the expense of meritocracy and inclusive political leadership. Today Venice is one of the world’s economic museums where millions of tourists throng to marvel at its former glory.
The depressing history of the extractive Kingdom of Kongo that haunts Congo to the present day is contrasted with the exploits of King Khama in 1895 that preserved the then Bechuanaland (Botswana) from the extractive colonial institutions and modernized its political and economic institutions. This explains why Botswana is to date the far most politically stable and prosperous economy in Africa.
More recently, the Arab spring triggered by the self-immolation of Mohamed Bouazizi in protest of police corruption and ill-treatment in Tunisia ended the grip of power for many iron-fisted men across the Arab world. Up to our north, the unending rise in prices of bread and fuel that sent women and children into street protest in the city of Atbara on December 19, 2018, eventually broke Omar Al-Bashir’s almost 30-year grip on Sudan.
These events are a clear testament to the futility of extractive institutions that Acemoglu and Robinson have vividly described. From their fifteen years of research, they conclude that sustainable economic institutions that redistribute wealth and shared prosperity cannot exist in the midst of highly extractive and exclusive political institutions. But of interest to us here is what practical relevance is this analysis to our country at this critical juncture in our history.
The last 5 years are probably the season that best brings the convergence of history, politics, and economics. Otherwise, how can we reconcile the following contradictory scenarios unfolding in our national fabric? One, how can the economy have expanded by an average of about 6% per year, creating over 850,000 jobs on average per year, yet the private sector has been shedding hundreds of jobs annually? In addition, the stock market has been operating at its lowest in 10 years.
Two, how can we have so many mega-development projects consuming thousands of tonnes of cement and steel yet all the companies in the sub-sectors are at various stages of collapse or sinking deeper into the loss-making territories? Three, how do we explain the drama on the proposed constitutional amendments via the “Punguza Mzigo” initiative versus the Building Bridges Initiative (BBI)”?
Now we are on the verge of another fiasco despite the final court verdict on Constitutional amendments. All these shenanigans seem to already have a predetermined outcome that serves the political elites only. This is despite using taxpayer money to serve the selfish agendas behind them.
We could find insights into these confounding contradictions from the accounts of “Why Nations Fail”. First, scanning through our political history and about 60 years into our independence, it is clear that the extractive and exclusive colonial institutions have been perpetuated with more vigor over the years; only this time by our very own political and tribal elites. That explains why multipartism was banned shortly after independence with the folding up of the Kenya People’s Union (KPU) in 1969. The costly human and economic transition into multiparty democracy in the early 1990s confirm this without a doubt.
Today, even though every eligible citizen is free to participate in the election process every five years, it is still highly doubtful if the outcomes represent the sacred will of the people. The gallant countrymen and women who brave cold mornings and long queues under the scorching sun to express their sovereign will may never be the ones who decide the president after all.
The proposition to re-create and constitutionalize political offices in government for losers in what’s supposed to be a fair, transparent, and competitive political contest is a “classical absurdity” of the 21st century. We walked that route in 2007/08 and the lessons learned informed the lean government constitutionalized in 2010. But do we ever learn from anything as a country no matter how painful the lessons are?
Second, the mystery of economic growth that never seems to permeate to the hard-working and resilient masses out here can only imply one thing: an economy under the grip of powerful aristocrats and by extension tribal kings who have no qualms mortgaging their communities for money and power. It is a fact that if you have no dirty money in this country, it will take more than a miracle to win an election in Kenya.
That probably explains why “shell” companies control billions in cash held in bank accounts with no known products or services sold to nobody. Equally, the high mortality rate of many such companies when their proprietors (who had roots and/or connections in government) transit to the next world explains it all.
Come to think about it, is it by coincidence that in most of the western prosperous world businesses (including many family businesses) that were established over 200 years ago are still strong, racking in billions in dollars each year despite their proprietors having expired centuries ago? Why don’t we have such businesses in Kenya?
Third, the tragedies of our extractive political and economic institutions, like anywhere else they exist, abhor the time-tested mystical and forceful power of “creative destruction”. It’s this creative destruction force that first turned around Europe and the rest of the Western world in the 18th century via the industrial revolution. The momentum of western prosperity was transmitted to the Far East world at the advent of the knowledge revolution in the second half of the 20th century.
The digital edge revolution has now collapsed the world into a global village. All these revolutions have had one thing in common: sweeping away political and economic mediocrity on their shores and re-creating a new economic order abundant with jobs and opportunities for all.
Unfortunately, it is widely accepted that in most of Africa and the rest of the poor world, we have never even fully exploited the opportunities of the agricultural and industrial revolution leave alone indulging in the greatness of the digital revolution. Does it surprise anyone that we cannot feed our populace, assure access to clean and safe water for human and animal nourishment, sustainably light our cities and villages, eradicate diseases eliminated in the developed world centuries ago or even make our own medicine for treatable ones?
It is simple, it requires no brainer… these are the crystal clear pieces of evidence that we missed out in all these cutting-edge revolutions.
Finally, is there any way out of this rat race of political and economic mediocrity for us as a country and society? Bill Clinton in his biography “My Life” opines that the moment you find yourself in a hole, the first rule is to stop digging, then find your way out of it.
It is my considered and humble submission to our generation and all Kenyans of goodwill and un-adulterated love of the nation and the people of Kenya to stand up against our extractive and exclusive political institutions perpetuated from one generation to another.
Only then can we create sustainable economic institutions and exploit the bounty of knowledge and digital revolutions. This way, we shall enjoy shared prosperity, transmit the Kenyan corporate influence and culture to the rest of the world and claim our rightful seat of honor among the community of nations!