Why poor countries have poor services and rich nations have better services
Joseph Mukasa is a peasant in Uganda. He has been performing well in expanding the output of his three acres piece of land. From an income of about Shs5,000 per month in 1995, (which when adjusted to inflation comes to Shs18,000 in 2015 prices), he now makes Shs130,000 per month. This is because he begun employing modern agricultural techniques such as fertilisers, irrigation and improved seeds that are both fast maturing and high yielding. In real terms, Mukasa has actually grown his income by 700% in 20 years.
Mukasa has a wife and six children. In spite of his growth in income, he cannot afford to send them even to cheap private schools where it costs Shs 400,000 per student per term (Shs 2.4 million per term for six children). Good private schools charge Shs 1.5 million. He has to buy cooking oil, clothes, kerosene and salt as well. So he sends them to UPE schools where they get poor quality education. When the children fall sick, Mukasa cannot afford to send them to private hospitals. He sends them to government health facilities with poor services. However, Mukasa also has a drinking problem. He spends Shs13,000 (10% of his income) per month on crude waragi.
Meanwhile, Mukasa’s neighbor, Haji Nasur Nsereko, is a businessman. He has grown his net profit (income) from Shs3.5 million in 1995 (Shs 12m in 2015 prices) to Shs 17m in 2015 – an increase of 30%. He has only two children whom he educates at the prestigious Kampala Parents and pays Shs1.5m for each per term. He also sends his children to the private International Hospital Kampala when they fall ill. During the end of year season, he sometimes takes his family for holidays in Nairobi or even Dubai.Nsereko also has a girlfriend at Makerere whom he bought a car and often travels with on business trips abroad. He has a mistress in Kampala for whom he rents an apartment where he stays when he is in city. And he has a couple of other girlfriends on whom he spends a lot of money in nightclubs when he is in Kampala shopping. He loves to party and is often in Govnor and Kampala Casino. In LC1 meetings, Nsereko says Mukasa is poor because he is lazy and cannot send his children to the best schools and hospitals because of drunkenness.
Mukasa’s children have internalised Nsereko’s criticism of their father. They are angry saying they do not get a good education or healthcare because their father is selfish and a drunkard. They complain that instead of spending his money on their education at Kampala Parents and treatment at IHK, he spends it on alcohol.
Mukasa’s children give Nsereko as an example of good parental care. They point at him sending his children to excellent private schools and hospitals and holidays abroad as evidence that he is not selfish like their father who “spends his money on alcohol.”
Mukasa’s children may be right to be angry with their father for his expenditure on alcohol. But they are wrong to claim that his drinking is the reason he does not send them to the best schools and hospitals.
They are also wrong to point at Nsereko sending his kids to the best private schools and hospitals or holidays in Dubai as evidence that he cares more about his family or uses his income better than their father. As we have seen from his lifestyle, Nsereko is more wasteful of his income than Mukasa. It is simply that his waste is covered-up by the large sums he earns.
This example is the crisis facing most analysis of governments in Africa. There are certain “obvious truths” we have created to explain our circumstances.
We argue that citizens of the poor nations in Africa have poor quality public goods and services because our leaders are corrupt and selfish. This argument is backed by a lot of evidence of wastage (as in Mukasa’s case) that it has acquired the status of gospel truth. To argue against it is similar to questioning the existence of God among believers. I will criticise it with a lot of humility because for many years I was among its leading advocates on the national, continental and global scene. Watch my TED speech, I make it with dramatic effect.
Indeed on our continent of Africa, as in other poor nations elsewhere, civil wars have been fought, military coups staged, organised popular insurrections, contested elections, broken marriages, built media houses, and governments have risen and fallen on this utopian orthodoxy. My personal retreat from it happened gradually and over time. It was a result of extensive reading of contemporary third world politics and the history of Western Europe and her offshoots in North America, Australia and New Zealand.
When I read books, newspapers, academic papers and watch documentaries on India, Pakistan, Bangladesh, Burma, Papua New Guinea, Afghanistan, Napal, Nicaragua, Haiti, El Savador, etc. and all other nations of Sub Sahara Africa, I find the story similar. Public goods and services are in a sorry state because leaders are corrupt and selfish. The implied (sometimes openly expressed counterpoint) is that rich nations provide their citizens better quality public goods and services because their leaders are selfless, honest and are held accountable. The more I read and regurgitated this gospel, the more I begun to suspect that something is wrong with it.
For example, I began to ask: how can so many nations on different continents share a common fate of selfish and corrupt leaders? In any case, all these nations had seen many changes of government without much change in governance. Governments in Africa change but the accusation of corruption and selfishness remains. May be it is because we lack democracy. But India has had a democratic system with regular “free and fair” elections, regular changes of government for 70 years but the problem of corruption and poor public goods and services seems to get worse.
Then the truths began to dawn on me: the common thread in all these countries was that they were poor. They had low per capita income, which led to low government revenue per capita and that itself led to low public expenditure per capita. All these nations have varying degrees of corruption. But I realised that like Mukasa, their corruption is not the explanation for their poor delivery of public goods and services. Like Mukasa they cannot afford better.
The second realisation was our everlasting belief that citizens of rich nations have better public goods and services because their leaders are selfless and honest. I have not studied many rich nations closely but I have studied the USA closely enough to make my claim. That like Nsereko, the USA wastes a lot of its taxpayers’ money on useless military adventures abroad (which benefit a few corporate oligarchs). Its politicians are more corrupt and selfish than ours. This is obscured from most American citizens (as it does in Nsereko’s case), by the vast sums it spends.
This realisation came to me slowly, spending nights looking at the public expenditures of Uganda, Kenya, Rwanda, Tanzania, India, Senegal, Zambia – and USA. The more I internalised it, the more I felt liberated. I used to be an angry young African wondering what was wrong with our race – that it produces the worst leaders. Then I became a calm and reflective African who recognises that our leaders face serious structural bottlenecks. The corruption and selfishness mantra is a conveyor belt of prejudice and ignorance.
Africa has very bad roads compared to say Europe and North America. And there is a lot of corruption in the award of road contracts across our continent.
But since it is an election period, let me avoid using Uganda and rely on data from Kenya. We have read horror stories of bad roads in Kenya and endless reports of corruption in road construction. But look at this.
Kenya has 161,000 kilometers of road. Of these only 11,000 have tarmac. This means that 150,000 are what are called gravel (or murram) roads. Many opposition politicians in Kenya blame corruption for their bad roads.
It costs about US$800,000 to build one kilometer of tarmac road for a double lane road. But because Kenya needs to build larger roads on major routes with four or six lanes (find figures for Thica road), let us say the average cost of a kilometer of road is $1.2 million. That means Kenya needs $180 billion to tarmac the entire road network. The budget for Kenya in 2015/16 is $20 billion. Even the most honest government that does nothing except construct roads, would take nine years at current spending to tarmac them.
So I wrote to the IMF for figures of government revenue in Kenya and for figures of government spending per year since 1990. So how much money has government of Kenya spent from 1990 to 2016 on all its activities? It is $202.58 billion – barely enough to perform one function of government – tarmac all its roads. And remember Kenya has to deliver education and healthcare, justice and accountability, industry and tourism, water and electricity, security and order, agriculture and hospitality and it has to placate the interests of its noisy elites.
When Kenya’s citizens, journalists and politicians think of their road network, they think it is in a sorry state because of corruption and the selfishness of their leaders.
But now I realise the contribution of corruption to its poor road network is statistically insignificant. The substantive issue is that Kenya just doesn’t have the money to pay for good roads. For example, it costs $150,000 to construct a kilometer of a standard gravel road. Out of 150,000km of gravel roads, only 40,000 are in good to fair condition. It would cost Kenya $16.5 billion to bring all her gravel roads to good condition – that is almost the country’s annual budget of $20 billion.
I know it is hard to convince people that the “corruption and selfish leaders” mantra is bereft of serious thought. This is because, as cognitive scientists tell us, human beings are cognitive misers. We prefer to do as little thinking as possible. So when we confront a problem, we actually don’t think deeply about it. We just retreat to our assumptions, biases, prejudices and pre conceived notions.
Why go around looking for proof and exposing inconvenient truths when you can just accept and regurgitate what everyone else accepts as the true. Why labour to establish why poor countries have poor public goods and services when there are accepted truths that this is due to the corruption and selfishness of their leaders or the laziness and racial inferiority of their people?
I could go on with explanations of how even without one shilling being stolen, Kenya or Tanzania and Uganda or any other nation of Africa, cannot deliver good quality healthcare to its people. The same applies to security, education, agriculture, justice, water, electricity etc. It is sad that our governments live in a modern world dominated by rich governments. This has led us to embrace bases of legitimacy of governments based on the governance models of rich countries. Yet we lack the necessary government revenues to govern the way rich nations govern their citizens.
I don’t want to be misunderstood to be saying corruption is not a problem. It is a problem but a minor one and it is not the fundamental explanation. In fact corruption is perverse because poor governments cannot pay their employees well. That means some steal simply to make ends meet. When the rich steal, they bribe poorly paid police officers, prosecutors and judges to get away with theft. Poor governments simply do not have the money to pay for the costs of effective oversight over their expenditure.
But most critically, at higher levels of government, corruption is the way the system works, not the way it fails. High-level graft is a characteristic feature of high politics even in rich countries like America, UK and France. The claim that African leaders are singularly corrupt is mistaken. Their high level corruption only becomes a ground for prejudice because there are so many of their citizens without basic public goods and services. But as already mentioned, even if there was no corruption, Uganda (or Kenya, Senegal, Tanzania, India, Ghana, Zambia, Malawi etc.) cannot do fundamentally better.
There are exceptions to this rule. For example, Rwanda, Cuba and Kerala (a state in India) have shown that nations with low per capita income can sometimes punch above their weight and deliver better public services like water, health, etc. But these are three examples among 137 poor governments – not enough samples to be generalized.
Many opposition politicians have defeated incumbents in Africa – in Zambia, Kenya, Senegal, Benin, Malawi, Ghana, Nigeria, Ivory Coast, etc. Other nations have seen change of government through military coups, civil war or popular insurrections. In all these cases, there has not been a dramatic change of governance, the sole exception being Rwanda. Museveni’s real triumph would be to lose to Kizza Besigye (like Milton Obote lost to him) so that he too can step down from the utopia of corruption as the reason for failure to seeing that his country, like Mukasa, is constrained by low incomes.