Restructuring Nigeria: The Irony of Corruption

I recently read a book titled: The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty co-authored by Clayton Christensen, Efosa Ojomo and Karen Dillon. Several of the conclusions in this book buttress some of my views about corruption in Nigeria.

The first paradigm the book throws out there is that corruption doesn’t result from a lack of ethics or knowledge and people in societies where corruption is common are not missing the fundamental moral fiber of those in non-corrupt societies, nor are they simply ignorant that there is a better way. Corruption is just a workaround chosen by people when they have few better options. One of the authors (Clayton) told a story of when he was a missionary in South Korea in the 1970s, a man visited them monthly to sell “safety” insurance. If you paid him, he guaranteed that your home would not be robbed; if you didn’t, somebody picked your house clean. Clayton says ‘’making sure that our modest possessions were not taken away was important for our survival, so we paid’’. Clayton came to the conclusion about this story that ‘’It’s only in hindsight that I see we were willing participants in a form of low-grade corruption — the kind that establishes a power balance in a community, makes lives easier (or harder, for those who don’t participate), and keeps the economic wheels of daily life greased. On either side, corruption was, and continues to be, a matter of survival’’. Clayton has clearly identified that both the burglar who sold safety insurance and the people who paid for the safety insurance did it as a matter of survival.They both had to survive! In Nigeria today I can boldly say that a lot of the pervasive corruption (low and high levels) is simply a question of survival. If you don’t bribe the clerk in the civil service your files will constantly go missing. The clerk must demand money to retrieve your ‘’lost’’ file because they cannot survive on their meagre salary. Everybody is just trying to survive!

The book posits that corruption is in most cases a hired tool for a job to be done – to help people make progress in a particular circumstance. The research done by the authors found that there are three powerful reasons why people hire corruption.

First, everybody in society want to make progress. From the jobless person looking for employment to the wealthy person looking to gain more status, we want to improve our financial, social and emotional well-being. When society offers few legitimate options to make progress, corruption becomes more attractive. Nigeria needs to create more avenues for people to make legitimate progress from the sweat of their brows. People out of job, or not paid or poorly paid will find a way to make progress and corruption is a shortcut.

Second, every individual, just like every company, has a cost structure. In business, a company’s cost structure is the combination of fixed and variable costs it incurs to run its business. Individuals have also a cost structure — how much money they spend to maintain their lifestyle — and it includes rent or mortgage payments, school fees, hospital bills and food. Just like companies, individuals must have revenues that surpass their costs. Understanding this revenue-cost relationship helps predict circumstances where the likelihood of corruption will be high. For example, if a police recruit in Nigeria earns N10,000 naira and Corporals earn about 40,000 to 50,000 naira per month. (approximately $120 dollars) but has a cost structure that demands he spends N200,000 a month, he will be susceptible to corruption, regardless of what the laws dictate.This would also apply to a poorly paid judge or a judge with a high cost structure.

Third, people hire corruption because most individuals — regardless of income level — will subvert the law to make progress or benefit themselves. According to Harvard academics Edward Glaeser and Andrei Shleifer, when confronted with a law that limits our ability to do what we want to do, most of us make a mental calculation: Do I need to obey this law, or can I get away with disobeying it? And which way will I be better off? If the scale tips toward disobedience, then it is irrational for the individual to obey the law, no matter how “good” it might seem. In Nigeria when the seat belt was introduced years ago many people got caught by police officers for driving without seat belts, but as people began to rationalize and conclude that wearing the seat belt is easier than bribing a police officer, we all wore our seatbelts and today it has become a habit.

The book drew some interesting conclusions about the fight against corruption:

Firstly, that 79 percent of the 7.6 billion people in the world live in countries with “corrupt” governments and more than two-thirds of the countries measured by global anti-corruption group Transparency International score lower than 50/100 on the annual Corruption Perceptions Index. The average score worldwide is 43. So, corruption is pervasive worldwide.

Secondly that development often precedes successful anti-corruption programs, not the other way around. Once enough markets are created, markets provide jobs that give people a viable alternative to accumulating wealth through corrupt means. There was a time when corruption in America rivaled corruption in some of the poorest countries today. Anti-corruption in America was not triggered by legislation or increased law enforcement; it came about because the fundamental equation of how Americans could make money, make progress, and make a living changed. The book used Taiwan as another example of a country that has reduced corruption by development – corruption reduced as citizens have options to grow wealth and wages grew across board.

I believe and emphasize that any anti-corruption war that does not include increasing wealth creation opportunities with shorter cycles in predictable environments is in for a long expensive war, which unfortunately has bleak prospects.

I recently read a book titled: The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty co-authored by Clayton Christensen, Efosa Ojomo and Karen Dillon. Several of the conclusions in this book buttress some of my views about corruption in Nigeria.

The first paradigm the book throws out there is that corruption doesn’t result from a lack of ethics or knowledge and people in societies where corruption is common are not missing the fundamental moral fiber of those in non-corrupt societies, nor are they simply ignorant that there is a better way. Corruption is just a workaround chosen by people when they have few better options. One of the authors (Clayton) told a story of when he was a missionary in South Korea in the 1970s, a man visited them monthly to sell “safety” insurance. If you paid him, he guaranteed that your home would not be robbed; if you didn’t, somebody picked your house clean. Clayton says ‘’making sure that our modest possessions were not taken away was important for our survival, so we paid’’. Clayton came to the conclusion about this story that ‘’It’s only in hindsight that I see we were willing participants in a form of low-grade corruption — the kind that establishes a power balance in a community, makes lives easier (or harder, for those who don’t participate), and keeps the economic wheels of daily life greased. On either side, corruption was, and continues to be, a matter of survival’’. Clayton has clearly identified that both the burglar who sold safety insurance and the people who paid for the safety insurance did it as a matter of survival.They both had to survive! In Nigeria today I can boldly say that a lot of the pervasive corruption (low and high levels) is simply a question of survival. If you don’t bribe the clerk in the civil service your files will constantly go missing. The clerk must demand money to retrieve your ‘’lost’’ file because they cannot survive on their meagre salary. Everybody is just trying to survive!

The book posits that corruption is in most cases a hired tool for a job to be done – to help people make progress in a particular circumstance. The research done by the authors found that there are three powerful reasons why people hire corruption.

First, everybody in society want to make progress. From the jobless person looking for employment to the wealthy person looking to gain more status, we want to improve our financial, social and emotional well-being. When society offers few legitimate options to make progress, corruption becomes more attractive. Nigeria needs to create more avenues for people to make legitimate progress from the sweat of their brows. People out of job, or not paid or poorly paid will find a way to make progress and corruption is a shortcut.

Second, every individual, just like every company, has a cost structure. In business, a company’s cost structure is the combination of fixed and variable costs it incurs to run its business. Individuals have also a cost structure — how much money they spend to maintain their lifestyle — and it includes rent or mortgage payments, school fees, hospital bills and food. Just like companies, individuals must have revenues that surpass their costs. Understanding this revenue-cost relationship helps predict circumstances where the likelihood of corruption will be high. For example, if a police recruit in Nigeria earns N10,000 naira and Corporals earn about 40,000 to 50,000 naira per month. (approximately $120 dollars) but has a cost structure that demands he spends N200,000 a month, he will be susceptible to corruption, regardless of what the laws dictate.This would also apply to a poorly paid judge or a judge with a high cost structure.

Third, people hire corruption because most individuals — regardless of income level — will subvert the law to make progress or benefit themselves. According to Harvard academics Edward Glaeser and Andrei Shleifer, when confronted with a law that limits our ability to do what we want to do, most of us make a mental calculation: Do I need to obey this law, or can I get away with disobeying it? And which way will I be better off? If the scale tips toward disobedience, then it is irrational for the individual to obey the law, no matter how “good” it might seem. In Nigeria when the seat belt was introduced years ago many people got caught by police officers for driving without seat belts, but as people began to rationalize and conclude that wearing the seat belt is easier than bribing a police officer, we all wore our seatbelts and today it has become a habit.

The book drew some interesting conclusions about the fight against corruption:

Firstly, that 79 percent of the 7.6 billion people in the world live in countries with “corrupt” governments and more than two-thirds of the countries measured by global anti-corruption group Transparency International score lower than 50/100 on the annual Corruption Perceptions Index. The average score worldwide is 43. So, corruption is pervasive worldwide.

Secondly that development often precedes successful anti-corruption programs, not the other way around. Once enough markets are created, markets provide jobs that give people a viable alternative to accumulating wealth through corrupt means. There was a time when corruption in America rivaled corruption in some of the poorest countries today. Anti-corruption in America was not triggered by legislation or increased law enforcement; it came about because the fundamental equation of how Americans could make money, make progress, and make a living changed. The book used Taiwan as another example of a country that has reduced corruption by development – corruption reduced as citizens have options to grow wealth and wages grew across board.

I believe and emphasize that any anti-corruption war that does not include increasing wealth creation opportunities with shorter cycles in predictable environments is in for a long expensive war, which unfortunately has bleak prospects.

I recently read a book titled: The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty co-authored by Clayton Christensen, Efosa Ojomo and Karen Dillon. Several of the conclusions in this book buttress some of my views about corruption in Nigeria.

The first paradigm the book throws out there is that corruption doesn’t result from a lack of ethics or knowledge and people in societies where corruption is common are not missing the fundamental moral fiber of those in non-corrupt societies, nor are they simply ignorant that there is a better way. Corruption is just a workaround chosen by people when they have few better options. One of the authors (Clayton) told a story of when he was a missionary in South Korea in the 1970s, a man visited them monthly to sell “safety” insurance. If you paid him, he guaranteed that your home would not be robbed; if you didn’t, somebody picked your house clean. Clayton says ‘’making sure that our modest possessions were not taken away was important for our survival, so we paid’’. Clayton came to the conclusion about this story that ‘’It’s only in hindsight that I see we were willing participants in a form of low-grade corruption — the kind that establishes a power balance in a community, makes lives easier (or harder, for those who don’t participate), and keeps the economic wheels of daily life greased. On either side, corruption was, and continues to be, a matter of survival’’. Clayton has clearly identified that both the burglar who sold safety insurance and the people who paid for the safety insurance did it as a matter of survival.They both had to survive! In Nigeria today I can boldly say that a lot of the pervasive corruption (low and high levels) is simply a question of survival. If you don’t bribe the clerk in the civil service your files will constantly go missing. The clerk must demand money to retrieve your ‘’lost’’ file because they cannot survive on their meagre salary. Everybody is just trying to survive!

The book posits that corruption is in most cases a hired tool for a job to be done – to help people make progress in a particular circumstance. The research done by the authors found that there are three powerful reasons why people hire corruption.

First, everybody in society want to make progress. From the jobless person looking for employment to the wealthy person looking to gain more status, we want to improve our financial, social and emotional well-being. When society offers few legitimate options to make progress, corruption becomes more attractive. Nigeria needs to create more avenues for people to make legitimate progress from the sweat of their brows. People out of job, or not paid or poorly paid will find a way to make progress and corruption is a shortcut.

Second, every individual, just like every company, has a cost structure. In business, a company’s cost structure is the combination of fixed and variable costs it incurs to run its business. Individuals have also a cost structure — how much money they spend to maintain their lifestyle — and it includes rent or mortgage payments, school fees, hospital bills and food. Just like companies, individuals must have revenues that surpass their costs. Understanding this revenue-cost relationship helps predict circumstances where the likelihood of corruption will be high. For example, if a police recruit in Nigeria earns N10,000 naira and Corporals earn about 40,000 to 50,000 naira per month. (approximately $120 dollars) but has a cost structure that demands he spends N200,000 a month, he will be susceptible to corruption, regardless of what the laws dictate.This would also apply to a poorly paid judge or a judge with a high cost structure.

Third, people hire corruption because most individuals — regardless of income level — will subvert the law to make progress or benefit themselves. According to Harvard academics Edward Glaeser and Andrei Shleifer, when confronted with a law that limits our ability to do what we want to do, most of us make a mental calculation: Do I need to obey this law, or can I get away with disobeying it? And which way will I be better off? If the scale tips toward disobedience, then it is irrational for the individual to obey the law, no matter how “good” it might seem. In Nigeria when the seat belt was introduced years ago many people got caught by police officers for driving without seat belts, but as people began to rationalize and conclude that wearing the seat belt is easier than bribing a police officer, we all wore our seatbelts and today it has become a habit.

The book drew some interesting conclusions about the fight against corruption:

Firstly, that 79 percent of the 7.6 billion people in the world live in countries with “corrupt” governments and more than two-thirds of the countries measured by global anti-corruption group Transparency International score lower than 50/100 on the annual Corruption Perceptions Index. The average score worldwide is 43. So, corruption is pervasive worldwide.

Secondly that development often precedes successful anti-corruption programs, not the other way around. Once enough markets are created, markets provide jobs that give people a viable alternative to accumulating wealth through corrupt means. There was a time when corruption in America rivaled corruption in some of the poorest countries today. Anti-corruption in America was not triggered by legislation or increased law enforcement; it came about because the fundamental equation of how Americans could make money, make progress, and make a living changed. The book used Taiwan as another example of a country that has reduced corruption by development – corruption reduced as citizens have options to grow wealth and wages grew across board.

I believe and emphasize that any anti-corruption war that does not include increasing wealth creation opportunities with shorter cycles in predictable environments is in for a long expensive war, which unfortunately has bleak prospects.