Opinion

Kidnappings and tragedy of a rent-seeking economy

GREG ODOGWU (CITIZEN SMITH)
Apexnewsgh

gregodogwu@yahoo.com 08063601665

Alarmingly, there are increasing cases of kidnappings around the country. I am not talking about the Kankara-type. That one enjoyed a photo-op because of its peculiar circumstances. There are countless others, which are cumulatively higher in casualty count than the Katsina incident. In fact, I am worried about how abductions have become a new occupation for faceless individuals all over the nation.

There is news that, on Tuesday, gunmen abducted Abuja-bound passengers on the Benin-Auchi road. This is now a new kidnap route? It used to be Abuja-Kaduna, Lokoja-Okene, and others. In another news, gunmen killed policemen and kidnapped two people in Jigawa State.

The other day, a friend told me how it suddenly began to happen in his village, a very interior, poverty-stricken zone in the backwoods. Peopled by the poorest of the poor, no one would fathom why on Earth someone could dream of kidnapping anybody there. There are obviously no bounties to cash, and no monies to haul. Yet, the evil enterprise sprang up. The local chief’s son was kidnapped; while the cousin of a supposed rich man was taken in a separate incident. Ransoms were named, negotiated, and paid.

Sadly, we have yet to see the connection between the spiraling cases of kidnapping and the kind of economy we have found ourselves in as a country. I have heard intellectuals and economists refer to our economy as a rent-seeking one, but I have yet to see them connect the dots between emerging social ills and our dysfunctional economy.

First of all, let us understand what it means to have a rent-seeking economy. Rent seeking is an economy concept occurring when an entity seeks to gain wealth without reciprocal contribution of productivity. The term rent in rent seeking is based on an economic rent which was defined by economist Adam Smith to mean payments made in excess of resource costs.

In public-choice theory, as well as in economics, rent-seeking means seeking to increase one’s share of existing wealth without creating new wealth. It implies extraction of uncompensated value from others without making any contribution to productivity. This results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, lost government revenue, heightened income inequality, and potential national decline.

The classic example of rent-seeking, according to Robert Shiller, is that of a property owner who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee to lower the chain. There is nothing productive about the chain or the collector. The owner has made no improvements to the river and is not adding value in any way, directly or indirectly, except for himself. All he is doing is finding a way to make money from something that used to be free.

How does this relate to kidnapping? The whole thing originates from the way our present ecosystem runs. Jobs are rarely given on merit. Promotions are hardly ever earned. Certificates seldom emanate from mental exertion. They are now purchased. Everything in Nigeria has a price. If you are rich, you can buy a job; you can procure promotion; you can purchase a certificate. It is no longer a secret. People do it in the open. Our bureaucracy is rotten.

All these services are supposed to be free; so this is classic rent-seeking. But, the Nigerian experts who discuss rent-seeking in public fora usually give the impression that we are a rent-seeking economy only because of the fact that we depend on minerals and crude oil (renting) for economic survival.

Indeed, we create rent everywhere, every day. Before a contractor’s file is moved up to the accountant’s desk, he pays rent to a Special Assistant to the Clerk. Before a petty trader gets a space to display her wares, she pays rent to the Personal Assistant to a Ward Chairman, who has created a “supervisory portfolio” for his cousin to “register” every trader in the ward. This “job” was created for him because he “contributed” to the election campaign of the Ward Chairman.

Rent-seeking is the order of the day because there is little production and manufacturing going on in our country. There are many mouths to feed, yet we only have politics and trading.

Rent-seeking is distinguished in theory from profit-seeking, in which entities seek to extract value by engaging in mutually beneficial transactions. Profit-seeking in this sense is the creation of wealth, while rent-seeking is ‘profiteering’ by using social institutions, such as the power of the state, to redistribute wealth among different groups without creating new wealth.

Kidnapping is part of rent-seeking because people who are close to government have discovered that this is the fasted way to collect their own rent from the rent-seeking system! In an economy that has no form of innovation, they are now forcing people to pay a percentage on their wealth. It is the same philosophy that drove the Yahoo-boys: “we are recollecting the money the Whiteman took from us”.

Indubitably, rent-seeking can prove costly to economic growth; high rent-seeking activity makes more rent-seeking attractive because of the natural and growing returns that one sees as a result of rent-seeking. Thus organizations and individuals value rent-seeking over productivity. In this case there are very high levels of rent-seeking with very low levels of output. Rent-seeking may grow at the cost of economic growth because rent-seeking by the state can easily hurt innovation. Ultimately, public rent-seeking hurts the economy the most because innovation drives economic growth.

It has also been shown that rent-seeking by bureaucracy can push up the cost of production of public goods. It has also been shown that rent-seeking by tax officials may cause loss in revenue to the public revenue authorities.

Mancur Olson traced the historic consequences of rent seeking in the book, The Rise and Decline of Nations. As a country becomes increasingly dominated by organized interest groups, it loses economic vitality and falls into decline. Olson then argued that countries that have a collapse of the political regime and the interest groups that have coalesced around it can radically improve productivity and increase national income because they start with a clean slate in the aftermath of the collapse. Nigeria needs such a reset!

Rent-seeking is a cancer eating the fabrics of our union. The best picture to help us understand the situation is to visualize the rate at which “transport unions” now spring up on local roads. Jobless youths are used by local cartels to collect all sorts of daily levies from drivers, motorcyclists and shuttle bus operators. Similarly, security agencies brazenly collect monies from drivers at every checkpoint. Years back, these “collection touts” were viewed as miscreants. Those were the days of the Lagos “Alaye”. Today, it is mainstream.

To be sure, rent-seeking is a global phenomenon, affecting developed economies like USA, China and Europe. But the difference between us and such governments is that their national institutions are so strong that the cartels who thrive on rent-seeking, can never hijack the society. Therefore, when rent-seeking coalitions are formed over time to shackle the society in order to redistribute wealth and income to themselves; political, social and technological changes shield the society from being overrun.

In Nigeria, the opposite is the case. Our institutions are so weak that rent-seeking cabals overrun and strangle it. This was why a former president said that Boko Haram was inside his government. Today, kidnappers, bandits, herdsmen could be part of the government. The cartels that live on rent-seeking are now so entrenched that removing them could literally end Nigeria as we know it.

Apexnewsgh.com/Ghana/Ngamegbulam Chidozie Stephen

Please contact Apexnewsgh.com on email apexnewsgh@gmail.com for your credible news publications. Contact: 05555568093.

Ngamegbulam C. S

Leave a Reply

does maxsize male enhancement work does natural male enhancement really work does pro plus male enhancement work does quick flow male enhancement work does rite aid sell male enhancement does rite aid sell male enhancement pills does vitamin e help male enhancement does walgreens have male enhancement does walgreens sell male enhancement products does walmart sell male enhancement products dominant male enhancement pills dominant male male enhancement dominant male male enhancement pills dominx male enhancement dominx male enhancement support don juan male enhancement pill don juan male enhancement reviews double x male enhancement double x male enhancement pills dr boss male enhancement dr d male enhancement dr oz best male enhancement dr oz endorsed male enhancement dr oz male enhancement pills and daily vitamins dr oz male enhancement pills reviews dr oz male enhancement recommendations dr oz male enhancement via lax dr oz natural male enhancement dr oz recommended male enhancement pills dr oz show on male enhancement dr phil and steve harvey male enhancement dr sebi male enhancement pills dr tobias male enhancement dr zimmerman male enhancement drachen male enhancement drops drachen male enhancement for sale drachen male enhancement official website drachen male enhancement review drachen male enhancement spray reviews dragon power male enhancement pills dragon strong male tonic enhancer dragon x male enhancement pills dragonflies male enhancement pills dragonfly male enhancement duraflex male enhancement duraflex male enhancement pills duro male enhancement duro xl male enhancement duromax male enhancement duromax testosterone male enhancement reviews dxl male enhancement dynamite super male enhancement reviews dynarex male enhancement e 3 male enhancement e 3 male enhancement pills edge male enhancement effective male enhancement pills effective male enhancement products el toro cbd gummies male enhancement el toro male enhancement cbd gummies el toro male enhancement gummies elite 909 male enhancement elite extra male enhancement elite extreme male enhancements elite male enhancement free trial elite male enhancement review elite male enhancement testosterone booster elite xl male enhancement eliteextreme male enhancement elongate male enhancement elongate male enhancement pills encore male enhancement pills encore natural male enhancement endovex male enhancement endovex male enhancement formula endowmax male enhancement endura natural male enhancement reviews endura naturals male enhancement reddit endura naturals male enhancement scam endura naturals male enhancement video endurance natural male enhancement enduros male enhancement pills enduros male enhancement reviews enduros male enhancement supplement engage x male enhancement enhance male enhancing formula enhance male libido naturally enhance male libido supplements enhance male testosterone naturally enhance xl male enhancement reviews enlarge maxx male enhancement entramax male enhancement enzyte male enhancement commercial enzyte male enhancement pills reviews enzyte natural male enhancement review epic male enhancement pills epic male enhancement side effects erec prime male enhancement erectafil male enhancement gummies erectin male enhancement reviews erex male enhancement reviews erexor male enhancement erorectin male enhancement eroxin male enhancement eruption male enhancement pill reviews erx pro male enhancement erx pro male enhancement pills euphoric male enhancement pill evaxatropin male enhancement reviews ever erect male enhancement everlast male enhancement everyday male enhancement evil root male enhancement evil root male enhancement pills evoxa male enhancement ex100 male enhancement excite male enhancement existence male enhancement existenz male enhancement expandom male enhancement pills explosion male enhancement pill extacy male enhancement pill reviews extacy male enhancement reviews extamax male enhancement exten zone male enhancement extend flow male enhancement reviews extend male enhancement formula extend plus male enhancement extended male enhancement extension plus male enhancement extensions iv male enhancement