WHY NATIONS FAIL; A REVIEW AND CONTEMPORARY INTERPRETATION FOCUSING ON UGANDA.- Prosper Ahabwe

The Book:

WHY NATIONS FAIL; THE ORIGINS OF POWER, PROSPERITY, AND POVERTY 

by Acemoglu & Robinson

 A REVIEW AND CONTEMPORARY INTERPRETATION IN UGANDA.

By Prosper Ahabwe.

Katanga Slum Area.

                                                                      Overview of Kampala Capital City.
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1. A Brief Review of the Book

In the book, Acemoglu and Robinson, discuss the Origins of Power, Prosperity, and Poverty. The book centers on the reason behind the successes and failures of nations in the Universe, paying a closer look at historical examples. The book pays close attention to the rise of European countries and the road to the Industrial Revolution, and why the Industrial revolution was delayed by the extractive and exclusive nature of their institutions. This was visibly seen in the failure of some ventures like the first discovery of the steamboat which was frustrating, the knitting machine, and other discoveries which were delayed due to sham institutions. The book also pays attention to why Spain started falling continuously while Britain kept rising as a world power, paying attention to the reasons why the US and Canada grew simultaneously while South America continuously fails.

The heart of the matter as expounded on by the book regarding why Nations fail is that Nations fail or succeed because of the nature of their political and economic institutions. The institutions are classified into two; Inclusive institutions which are developmental, and Exclusive and Extractive institutions which are detrimental to development. The authors argue that nations adopting inclusive political and economic institutions are much more likely to succeed regardless of their geography. While nations that adopt or inherit extractive and exclusive institutions suffer perennial economic malaise and absolute poverty.

Of all the comparisons, the authors use the analogy of the two Nogales in America. Nogales Arizona and Nogales Sonora. The former is developed, with a high per capita, developed infrastructure, and a high standard of living, while the latter is underdeveloped, with poor infrastructure, unemployment, and a low per capita. Yet the two towns are only separated by a border wall. The two towns have similar people. Same geography and the same culture. But in digging deep, the kind of institutions built by the different colonialists on either side is different, and later alone the subsequent governments.

The argument lies that inclusive economic institutions encourage a great mass of people to participate in economic activities and make the best use of their talents and skills for the fields of their choice. That inclusivity necessitates the security of private property, an unbiased system of law, and the provision of public services that ensure a leveled playing field in which people can exchange and contract.

Inclusive political institutions destroy power monopolies which would be used to create extractive economic institutions. This is because power is broadly distributed and not concentrated in the hands of a small elite.

The deduction that one can take is that the author's message regards the fact that the only way to developing nations, is the adoption of inclusive political and economic institutions.

UGANDA; The Status Quo

The Ugandan situation is a complex one with duo characteristics. Some areas are quite slightly rich with good public services and a high per capita while other areas are languishing in poverty, ignorance, disease, and starvation with a lack of basic facilities. Such areas include a bigger part of the Karamoja sub-region, parts of West Nile, Eastern Uganda especially the districts of Amuria, Bukedea, Kumi, and others, and parts of Western Uganda like Bundibugyo among many other parts. While mainly the Central and the West are doing quite well compared to the other two regions, the situations are still not good. Mass unemployment, rural-urban migration, slummy areas, and general public service deficiency exist.

The situation is equally not good with the political institutions which are infested with excessive powers vested with the executive especially the institution of the presidency; powers that determine even who gets a government contract. Absolute corruption and severe embezzlement, open bribery, and unfair elections. The executive is hardly accountable to the Legislature as parliamentary resolutions are disrespected by the executive, and the judiciary is partly independent with a limited force of law.

This rhymes with the shambolic economic and social situation characterized by a low per capita, poor service delivery, poor infrastructure, famine, slums, and general poverty that characterizes the majority of Ugandan society.

'WHY NATIONS FAIL' IN A UGANDAN CONTEXT

In the book, the authors bring a contrasting analogy of Nogales Arizona and Nogales Sonora in the side US and Mexico respectively. Here I am going to compare two places as well.

In the Ugandan Capital City of Kampala, there are two places separated by Kira Road. Kiira Road, which branches from Wandegeya, has two sides. After the Acacia junction, as you proceed, there are two different sides. On the left side lies the streets and slums of Kamwokya, characterized by rusted roofs, poor sanitation, poor housing, overcrowding, poor infrastructure, and general symptoms of poverty. While on the right side of the road, lies the streets of Bukoto and Kololo, where there is better infrastructure, salivary-carpeted flats, paved walkways, better service delivery, and general conditions of wealth. Unlike the two Nogales where the governmental systems are different and have facilitated different types of institutions, here the difference is orchestrated by the same government system and the dictates of the private sector. One thing interesting though is the fact that in the Kiira road case, the people who work as junior or low-earning servants in the corporations on the right side, are the ones who reside on the left side- probably as what they can afford.

Another site comparison related to the above is in Wandegeya, Kampala. Just after the Mulago roundabout, on the downhill lies the Katanga slummy area, while uphill after the road lies Mulago hospital and its slightly improved neighborhood. While after the slummy valley, the streets of slightly rich Wandegeya with towers and flats lie. The slummy Katanga is infested with a general lack of sanitation, extremely poor housing, drug addicts, heaps of half-clothed children begging all the time and deriving their dinner from the rubbish heaps, badly off sanitary conditions, and the stench of absolute poverty, ignorance and disease fill the air. The slum area is surrounded by the rich Wandegeya town, Makerere University, Mulago National Referral Hospital, and the Public Service Ministry. All these institutions are separated from the slum by just roads. Katanga exists because these institutions exist. It is the low-level workers in these institutions that derive their sustenance from the slummy Katanga. These workers find their affordable level of rental houses and cheap food in Katanga.

From the analysis of the two areas in question, it can be deduced that unchecked institutions give less consideration to low-level workers and their welfare. It shows exploitation and a poor relationship between the employing bodies and the employed. Sadly, most of these employers are state corporations and governmental bodies alongside private entities.

This shows that both government corporations and private entities pay less regard to employee protection. The protection of workers always lies in the responsibility of the government to provide proper legal frameworks and sanctions for failure to do. This is formally through setting a minimum wage, and other conditions that must be satisfied. The situation becomes sour when the same government officials responsible for the implementation of these worker protection mechanisms are also corporate employers. In that case, they are not expected to whip themselves, and this is the case with Uganda. The protection of workers is in limbo due to a lack of an efficient declaration of interests system, a symptom of dishonesty and corruption orchestrated by unchecked exclusive political institutions.

COMPARING DESERT LIBYA, AND TROPICAL UGANDA

Libya is a desert by nature blessed with hardly anything besides oil fields. Uganda is a tropical state blessed with multiple minerals, a tropical climate, fertile soils, and a good terrain, and for some decades oil has been discovered. But interestingly, desert Libya before the fall of Gaddafi spent about 30 years without experiencing famine, while tropical Uganda has for the past 20 years been listed by the UN Food and Agricultural Organization (FAO) as one of the countries in constant need of food relief. One wonders what went right in Libya, but went wrong in Uganda.

While comparing the nature of institutions responsible for the famine/food in both countries, we can look at it keenly. Whereas Libyan political institutions were more exclusive, her economic institutions were inclusive and less extractive. Thus agriculture was given a proper investment that was evenly distributed, and the Jamahiriya nature of the state facilitated inclusiveness in decision-making regarding agriculture. The inclusive nature spread to the infrastructure which was better off and doing well that facilitated the presence of food at all times.

On the contrary, the Ugandan agriculture sector is exclusive and extractive. The state makes sham investments in agriculture under the command of the army and presidential appointees. The state gives agricultural incentives to foreigners and a few local large-scale producers. The exclusiveness and the segregative nature of these institutions coupled with the exclusive and extractive entities meant to facilitate proper marketing of the product are responsible for the low agricultural production. The segregative nature extends to a lack of geographical consideration for some areas, for example, the Karamoja region receives the lowest rain, and yet there has not been a proper scheme to boost agriculture in that area.

This explains why the two countries that adopted different institutions have severe differences in agricultural welfare.

A CLOSER LOOK AT THE NATURE OF UGANDAN INSTITUTIONS

Whereas a growing private sector provides an incentive for development and national success, such a private sector can not flourish without a few necessary public services meant to provide a leveled playing field.

In this particular piece, we concentrate our attention on three basic institutions that ought to have done their duty to national development in the areas of education, transport, and economic facilities.

In the area of public service, there is severe laxity on the side of the state, where service delivery is failing in a large state. The people that run these institutions of state for public service are appointed by the executive with little or no sanction from Parliament. The appointing authority goes ahead and dictates who should be appointed even for the lower departments, and the appointments come not on merit but on consideration of political rather than competence factors. Further to that, the appointment is meant for a specific class of people, from a particular area. In 2021, Ugandan President Gen. Yoweri Museveni Tibuhaburwa while delivering an address to the nation told the public that he would since start appointing people from rich families to head governmental departments and public service. Regardless of the unproven reasons he advanced, this particular statement shows you how he has always done it. In fact, it rhymes with Robinson and Acemoglu's statement from the Constitution of South Carolina of the 19^th Century; Let the Children of leet-men be leet-men and so to all generations.

While Museveni makes this statement that undermines the need for inclusive institutions, he actually acts on this statement. As such, for the Uganda Airlines Company which was revived, he recently appointed one Jenifer Bamuturaki as its CEO, even when a parliamentary committee found that the appointment was extraordinarily irregular, and the appointee lacked the credentials to head such a national enterprise. In fact, within a few days, parliament unearthed the corruption and incompetence scandals of Bamuturaki. Need to note that the Airlines enterprise is suffering severe losses and making no profit. That is one example of the danger and viciousness brought about by the extractive and exclusive institutions, which becomes a major impediment to development.

 

Another impediment to development that has become a pillar of poverty is the education institutions. Besides the underfunding and under-facilitation of these institutions, there is gross mismanagement and misappropriation of funds, as the major facilitators of development. It should be noted that education is a fundamental pillar of national development. For a state to develop through education, the educational institutions must be properly state-facilitated, more inclusive, and more broad-based. In an essay released in 2022 titled, The Barbarous Cycle of Poverty with Education (found on prosperahabwe.blogspot.com), the argument was that for the greater majority of the population to escape the fangs of poverty, there must be a certain level of adequate education which facilitates skill and entrepreneurial development.

It is therefore fundamental that educational institutions should be strengthened to facilitate development. In the Ugandan context, however, the institutions of education are promoting extraction and exclusion, especially the institutions of higher education. Much as the government promotes Universal Primary, and Universal Secondary Education, in a bid to lessen the cost of education, it is noteworthy that most of the students who graduate from secondary education possess no practical tradable skills. When it comes to University and tertiary institutions, the state provides scholarships for a limited number of students leaving the others to their fate and that of their parents. The major tertiary institution in the Country is Makerere University. Makerere University receives the highest number of students per intake. Yet the University itself promotes extractive and exclusive policies. For example, the University in 2018 approved a tuition policy that pursues a cumulative 15% increment on the already high tuition fees every year. It should be noted that Uganda's majority lie below the International Poverty line. Leave that aside, the majority of those employed by the government in public service, with their remuneration levels can not afford the tuition bills of Makerere University. It is therefore an understatement to say that the state's National University sought to eliminate or phase out the children of the poor. This exclusive and extractive policy can never guarantee inclusion, and as a matter of fact, it makes development stagnant.

The nature of institutions being exclusive and extractive is a perennial and universal concept as of now in the Ugandan situation. Needless to talk about institutions like the Uganda Railways Corporation which was involved in land scandals, the national referral hospital, and its subordinates, amongst other government entities.

 WAY FORWARD

Since it is now acknowledged that nations succeed because of the nature of their institutions, then the undeveloped nations must check their institutions and reform them to make them more inclusive.

Whereas nations are reformed by reforming the nature of their institutions, institutions are reformed by reforming the nature of their systems, and the policies that run these systems. Thus there is a need for a System and Policy reform for most of the institutions that the Ugandan economy depends on. This mantle is taken by a government whose political institutions are inclusive to facilitate inclusive economic institutions, and such a government can only be realized in the existence of a free and fair democratic process. Institutional system and policy reform can also be done individually by the people who head these institutions and all the stakeholders.

Conclusion

It is only after realizing a system and policy reform in Ugandan institutions, that we shall know what development actually is. 

Other Works by Prosper Ahabwe

What I write when I am Hungry series; Smiles of the Moon

Why Africa fails in 2020

The mystery of democracy in a semi-literate society; the case in Uganda. 2021

Human Survival Under the Wave of COVID-19. 2020

The Barbarous Cycle of Poverty revolving around Education 2022

Uganda’s Governance Delusions 2021