Annex 3 Political Economy of Policy Change in Nigeria

Annex 3 Political Economy of Change in Nigeria A3.1 Introduction The most striking feature of Nigeria’s political economy has been its “recursive” nature – the tendency to revert, despite a succession of reform attempts, shifting political alliances and institutional changes, to the same fundamental patterns of conflict and political behaviour. This reflects deeply rooted in structural features of Nigeria, that have existed at least since Independence and in many respects predate it. These can be summarised as: · A complex and shifting set of alliances and conflicts based around two divides that have principally structured politics: a tripartite regional/ethnic divide (North – Hausa/Fulani, South West – Yoruba, South East - Igbo) and a Christian/Muslim religious divide, along with innumerable sectional and interest group divides (for instance between competing business interests). In general though regional/ethnic and religious politics have been of far more significance than class-based politics. · The role of oil in providing since the early 1970s both the overwhelmingly most important source of government revenue and the major source of economic instability. · The predominantly rural population, despite a significant trend towards urbanisation, and the concentration of poverty among the rural population, with the associated difficulties of achieving a united or effective political voice for the poor. · The lack of any significant external threat or cultural or historical traditions favouring national unity, in a large and diverse country with relatively poor communications and infrastructure. Nigerian political leaders have faced the problem of maintaining national unity and containing potential and actual violence, through managing conflicts over resources and (increasingly) over religious ideology. This violence has, since the failure of the Biafran Secession, generally been contained to the local level. This has been achieved, in the absence of strong or effective state institutions, through a patrimonial politics which has sought to incorporate elite groups (and their clients) in the division of state resources, under the general hegemony of Northern elite groups focused on the military. But this has been at the cost of: · Failure to achieve fiscal control or to manage oil price-induced economic volatility without incurring immense economic costs. 1 · Failure to achieve “accountability to rules” or respect for public institutions throughout society and government, leaving the state vulnerable to larceny on a grand scale by those entrusted with the control of resources. · A continuing fragmentation of the state through the creation of new government entities (states, local governments, parastatals) in response to claims from those considering themselves disadvantaged under existing arrangements, and the lack of effective agencies of restraint at any level of government. · The marginalisation of groups who are not effectively represented within the patrimonial system. A variety of different regimes have grappled with varying degrees of seriousness with this set of problems. In particular, a large number of constitutional and policy solutions have been attempted. These institutional reforms have focused principally on: · Revenue-sharing arrangements between different regions and levels of government. · The structure of local government. · The party and electoral system and the role of the legislature and executive. · Attempts to achieve fiscal discipline. Although there have been some periods of relative success (for instance the strong economic response to structural adjustment reforms in the earlier part of the Babangida period), the most striking feature is the continuity of the basic elements of the Nigerian political system, and the persistent failure of reform initiatives to effect decisive change to improve governance or economic management and to move Nigeria towards being a “developmental state.” This annex discusses the experience of institutional reform attempts in Nigeria since Independence. It is structured as follows. Section A3.2 discusses the concept of the developmental state and uses a typology of state types to elucidate a range of alternative models and the types of institutional change that would have been necessary to have achieved a movement towards a more developmental form of state. Section A3.3 summarises the main institutional reform efforts. Section A3.4 discusses the role of different agents in the political process, again focusing on continuities over the post- Independence period. The final section presents conclusions. 2 A3.2 The Developmental State and Nigeria Leftwich (1995), based on a discussion of seven successful developing economies1, identified six key features that he characterised as constituting a “developmental state” that was able to pursue a coherent and long-term development strategy. These were: · A determined developmental elite, in: · A weak and subordinated civil society, which confers: · Relative autonomy, that is deployed by: · A powerful, competent, insulated economic bureaucracy, in: · The effective management of non-state interests, while: · Political legitimacy is conferred first by repression, and then by performance. Auty and Gelb (2001) characterise the developmental state as one state type defined in the framework shown in Table A3.1, which derives from Lal (1995). This framework defines the nature of the state in terms of the restraints on it and its aims. Autonomy Aims Sub-type Markets role Examples Autonomous Maximise Developmental Hard constraint Indonesia, benevolent social welfare Hong Kong, S. Korea, Singapore, Taiwan Paternalistic Relaxed Brunei, Kuwait, monarchy constraint Saudi Arabia Autonomous Maximise rent Military elite Soft constraint Nigeria, Ghana predator siphoning Central Soft constraint Myanmar, N. planning Korea Factional Maximise Consensual Hard constraint Malaysia, democracy social welfare Botswana, Chile Polarised Relaxed Costa Rica, Sri constraint Lanka, Jamaica Factional Maximise rent Urban/industry Soft constraint Argentina, oligarchy siphoning captures policy Bolivia, Brazil, India, Mexico Public officials Soft constraint Azerbaijan, capture policy Kazakhstan, Russia, Uzbekistan Ethnic alliance Soft constraint Kenya, Sudan, captures policy South Africa 1 South Korea, Taiwan, China, Indonesia, Malaysia, Thailand and Botswana. 3 Within this framework, the autonomous state has the capacity to formulate and pursue its own objectives, while a factional state is beholden to political groupings that must be appeased. The aims of the state may be placed on a spectrum between predation (rent siphoning) and social welfare maximisation. The extent to which market constraints (including the government budget constraint) are relaxed is a measure of the pressures towards economic efficiency. 2 While this framework may be criticised as excessively narrow and failing to explain the relationship between autonomy and aims or the underlying causal mechanisms, it provides a useful perspective in which to consider the Nigerian experience, in terms of the types of policy and institutional changes that might be required in order to move towards a more developmental state model. Auty and Gelb note that resource-poor countries are particularly likely to follow the autonomous benevolent developmental state model, since there are few sustainable options for rent predation. Auty and Gelb characterise Nigeria as an autonomous predatory state. The discussion below suggests that this may be an oversimplification, and that in some respects Nigeria might better be characterised as a factional oligarchy in which policy has been captured by a military (and regional/ethnic) elite, but in which there are strong pressures from other elite groups that require accommodation by the ruling elite – which is not itself a single or entirely united group. Nigeria also has in certain respects an extremely active and organised civil (and unicivil) society. What Nigeria has conspicuously failed to achieve has been a hardening of market and government budget constraints, or a move under any type of political regime towards a consistent pursuit of developmental objectives, rather than the division of rents derived from oil revenues. A3.3 Patterns of Institutional Reform A3.3.1 Organisation of the Federal System In the words of one of the country’s most prominent nationalists in 1947, Chief Obafemi Awolowo, Nigeria represented little more than a “geographical expression”. The biggest problem the country has faced since independence is to build national unity and establish a viable federal system of governance where ethnic and religious diversity can coexist and public policies are directed towards improving the welfare of all citizens. Constitutional negotiations in 1953/54 instituted a federal constitution, which transferred powers from the colonial government above and the native authorities below to regional governments. The country became administratively divided into three regions, each of which was relatively distinct and independent. At the end of the Colonial Rule in 1960, Nigeria as a state constituted a construct with a plurality of overlapping political and linguistic identities, founded on the federation of these three regions. Each region was 2 The lack of examples of a predatory state with hard market constraints suggests that in practice predatory state are rarely autonomous since softening market constraints is a characteristic way to accommodate and deflect conflicts

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