In recent years, a lot of studies have shown that political institutions and governance can enhance or mar economic development. For instance, it has been suggested that within the discipline of economics, the ‘new institutional economics’ has broken with the conventional neoclassical focus on factor endowments and technology.
They further state that politics and institutions account for the wide variation in economic structure and performance throughout history and across the world.
An important insight is that successful economic development depends on a political and institutional environment that aligns the political incentives facing governments with the requirements of economic growth and improved social welfare.
The closer the alignment, the more likely governments are to make credible and sustained commitments to constructive policies and systems of public administration.
Conversely, where governments’ incentives are at odds with developmental imperatives, policymaking and implementation are vulnerable to economically damaging political opportunism.
Arguably the strongest temptation for Nigerian politicians to jeopardize our country’s economic development prospects is rooted in the persistent political insecurity.
Our politicians facing imminent threats to their hold on power often have shorter time horizons and are more preoccupied with placating the specific groups most pivotal to their survival. As such, they most often place high priority on the short-term interests of their narrow constituencies, at the expense of longer-term social welfare of the entire country.
Such tendencies, no doubt have been responsible for the myopic self-interested political interventions associated with policymaking processes and public administration, whose outcome, even if not told, are the economically damaging consequences that poor citizens live with.
The main potential checks on these temptations are strong political institutions with the propensity to force our politicians to ‘internalize’ the social costs of their opportunistic behaviour.
For example, we are all aware that institutions of political representation make governments responsive and accountable to broader constituencies through competitive elections, and