How the ideology of a welfare state has destroyed our continent and impoverished its people
Everywhere I turn these days, Ugandans (and Africans generally) are complaining about the sorry state of our education and healthcare systems. There is a widespread belief across development literature that state (or public) investment in health and education is a panacea to the problems of development.
I recently saw Bill Gates in Nigeria regurgitating this mantra on CNN. It is intriguing how people, even the most enlightened, can pick on an idea that lacks historic precedent and turn it into a widely accepted truth.
The reader should note that I am not against education and healthcare. There are many economic and welfare benefits that come with an educated and healthy citizenry. I am against the idea of publically funded universal education and healthcare in poor countries for the simple reason that they do not have the resources to do it. But this ideology has led our people to expect the state to provide these social services for free to everyone, everywhere.
The idea of a nanny state doesn’t stop at only publically funded healthcare and education. Recently, the government of Uganda and its “development partners” began piloting a project in thirteen districts where the state will be paying an allowance to all poor elderly citizens in the country. The plan is to make it universal. The government of Uganda is very poor. Public spending per person (total national budget divided by total population) is about $170 this financial year. Yet our government wants to construct a welfare state with functions rivalling those of the USA where public spending per person this year is $21,860.
Ugandans (and Africans) may never know how debilitating this state welfare ideology has been first, to the evolution of a functional state; second, to the development of the right social attitudes and mentality for individual and collective progress; and third to the economic transformation we seek. I will address the effects of this state welfare ideology on these three points in turn.
The idea of a welfare (or nanny) state is a recent one. It emerged in the early 20th century and gained traction most especially after World War Two. Historically, people’s education, health and pensions were the responsibility of the individual, his/her family, the church and other charitable bodies. Across the Western world, it was not the responsibility of the state to babysit citizens. People progressed based on individual initiative.
The welfare state ideology was occasioned by the transformation of Western countriesfrom backward rural, agricultural societies to modern urban industrial nations. This led to the development of a large middle class, professionals, organised labour and “civil society.” But its most definitive feature was the enormous growth in state revenues due to increased incomes.
Thus, at the time most Western nations adopted the welfare state, governments hadresources to pay for it. However, this ideology was transferred to poor countries as a religion without any consideration to their resource capabilities. In fact it became “the way every state functions”. This has burdened states with responsibilities they have no capacity to handle.
Look at the state of Uganda as an example. Our government promises to provide education and healthcare to everyone, everywhere for free – on a budget of $170 per year. This is absurd. The consequence is that the state is overdeveloped in function but underdeveloped in capacity; its reach goes far beyond its grasp. This is the leading cause of widespread corruption and incompetence. Ugandans may never realise that it is attempts to do everything for everyone everywhere on a shoe-string budget that is the cause of the institutional dysfunctions we so often complain about.
The second effect of the welfare state ideology is on the mentality of our educated elites. Everywhere people complain that government has not done this or that for them. There is very little attempt to take personal responsibility for one’s failures. The mentality that personal advancement is a responsibility of the state rather than the individual is destructive. Someone acquires a bachelors or masters or PhD and comes out believing that this entitles them to a well-paying job. No one pauses to ask whether they have the requisite skills sought by potential employers.
Uganda’s does not have a problem of unemployment. Our people lack the right skills. There is no one with skills, right work ethic and attitude that can increase a company’s bottom-line who can fail to find a job. In fact companies in Uganda are looking for skilled people and they cannot find them. Our companies are importing people from Kenya, Zimbabwe, South Africa and India. How can a country importing labour be suffering from mass unemployment? It is because educated Ugandans believe that one gets a job on the basis of a degree certificate rather than acquisition of skills that are marketable to the companies in our midst.
This brings me to the third point on the effects of the welfare state ideology to the economic transformation we desire. Economic growth cannot be a product of central planning by the state. This is because the knowledge necessary to allocate resources appropriately to serve our wants and needs cannot be centralised. I am inclined to agree with Frederick Von Hayek that to realise the transformation we want, we must always as far as possible seek to rely onspontaneous forces in society i.e. the actions of multitudes of individuals in the marketplace.
The welfare state ideology insists that growth comes from the actions of benevolent individuals in the state largely acting out of kindness and good natured-ness. It is an ideology whose extreme was socialism and communism. And we all know this led to economic ruin. Yet this ideology has remained dominant even in Western capitalist societies in spite of its debilitating effects on many social groups in those countries.
At least rich nations can afford to subsidise those of their citizens who are poor, even though it hurts the beneficiaries of state largesse. But Africa is far too poor to embrace this ideology. It creates very high but unrealistic expectations. When unmet, unrealistic expectations cause social frustrations. In Uganda’s case, this welfare state ideology has cultivated an entitlement mentality in large sections of otherwise productive youths that they should the state owes them jobs even when they don’t have marketable skills.
This mentality is worsened by ambitious politicians. Voters want to be told what they want to hear. Hence politicians are incentivised to perpetuate the myth that the state will provide everyone everywhere with everything.