Dr Pat Utomi delivered a thought-provoking paper at the on-going 42nd Annual Accountants Conference organised by the Institute of Chartered Accountants of Nigeria. The paper was titled ‘Building Enduring Institutions For National Development’.
Please find below excerpts of his presentation –
“What really are institutions and how come Neil Ferguson turns to them to explain how China which was more advanced than Europe 350 years ago suddenly stagnated for 300 years? Essentially institutions are rules, boundaries to conduct, which make it easier to anticipate behavior. Over time they become settled habits of a community, as the old institutional economics school point out. When costs are placed on conduct outside agreed range of behavior and the rule of law ensure that they are followed, it is easier to anticipate transaction engagement. Where boundaries and consequences for conduct outside those boundaries are unclear, for example in the country of the big man, might tends to be right rather than the rules. Outcomes are more difficult to predict…”
“Institutions have and follow rules, strong men have friends and follow whims. The outcome from one is calculable probability of outcomes; from the other uncertainty. Uncertainty makes decision making problematic and often results in either the avoidance of economic engagement or the high cost of hedging against undesired outcomes. These high transaction costs translate to uncompetitiveness for the economy.”
“In my view, if we are to build institutions, business associations, and citizens should become freedom fighters without guns for issues that will produce better context for human engagement. In some ways my views on a pattern of resistance is reinforced by what I hear every time I meet the great statesman, First Republic Minister, Maitama Sule Dam Masani Kano. He usually says” Pat whenever I think of you, I think of Ghandi and of Mou. You must never give up. Nigeria needs you” I will then joke that I would rather Ghandis’ painful self sacrifice and resistance than Mou’s “I have blood to waste”.
“Where people feel they are victims of injustice, it is hard to find peace. Where there is no peace, progress is improbable. A just society is desirable and made likely by institutions that met out consequences in a manner blind to who is involved. Where this injustice involves property rights, they make the likelihood of investments and economic intercourse, in general,low. If it is so obvious why do enough of us not care enough to sacrifice to change current conditions. One clear way to go is to create conditions to give you as individuals or associations the locus standi to cause review of rules which frame new boundaries. This is particularly important as the Nigerian Judiciary has often hidden behind the locus standi doctrine.”
If China stagnated after much progress under the Ming dynasty 300 or so years ago., and Argentina dropped from being at par with the United states in the 1990s because of failure of its institutions to continue to evolve, the kind of failings that have given us this recursive economy after wise policy changes, weak institutions, must be combated for the love of the next generation. One outcome forms already is the factor of a generation that left town. We lost our best in a crucial building era in brain drain because of weak institutions that allow the state to despoil the citizen. We cannot go on like this. Those who fear to fight back must realize that history will hold to account and that in the sense of the Franz fanon rebuke, every generation must discover its mission and either fulfill it or betray. To fail to build institutions that support growth and stability is to betray the mission of this generation.
For the full text of his speech, click here.
Are Nigerians doing enough to build strong and virile institutions that will engender economic development? Is the Government doing enough or are they standing in the way? Go to the comments section below and tell us what you think.