Re: USA Africa Dialogue Series - Fwd: [NaijaElections] What Nigeria needs now is fiscal discipline, not borrowing, says IMF Managing Director

Dear Moses:

Let me add something to what you have elegantly articulated: the "aloofness" that you speak of actually explains why there tends to be so much corruption in countries whose governments receive a significant portion of public revenues from royalties paid by transnational companies for exploiting natural resources. Many citizens see the revenues accruing to the government as windfalls that are available for "chopping" and the only time individuals or communities complain about corruption is when (i) they are not involved and hence, are not chopping; (ii) the corrupt individual is not part of the ethno-regional (identity) group that they belong to; or (iii) the corrupt person is selfish and is unwilling to share the ill-gotten gains. Unfortunately, many of us still view government as an alien entity--the people do not consider the government a product of their efforts nor do they see government as an arrangement that enhances their peaceful coexistence, or helps them maximize their values. Hence, native sons/daughters who have government jobs are expected to use those positions to extract as much benefits (and this includes money) for the identity group. 

Stay well. John 

On Thu, Jan 7, 2016 at 10:33 AM, Moses Ebe Ochonu <meochonu@gmail.com> wrote:

Precisely, Professor Mbaku. This is an argument I have been making in both private discussions with my compatriots and in my writings, including in my book, Africa in Fragments. In fact it is the most potent argument for fiscal federalism and fiscal decentralization. People often say to me: how do you expect states without oil to survive, and wouldn't we just be decentralizing corruption and other malfeasance that characterize the Abuja oil revenue bazaar? My answer has always been that, 1) fiscal federalism will compel non-oil producing states to look inward to other revenue generating avenues, including taxes and levies, 2) that if internal taxes within a state constitute the revenue base of such a state government, the tax-paying people will fight for accountability and will hold public office holders accountable. It is their money, in a very literal sense. They will abandon the current aloofness that is engendered by the fact that the (oil) revenue source is distant, mysterious, and impersonal, and thus unworthy of personal emotional investment. In a nutshell, I tell people that fiscal federalism, real fiscal federalism, is a way to solve two problems at once. First, it will considerably douse the political tension and mutual suspicion and distrust in the country while encouraging healthy developmental competition between constituents and regions. Second, at least for the non-oil producing states, it will considerably reduce the corruption problem we always lament and encourage accountability.

On Thu, Jan 7, 2016 at 11:12 AM, John Mbaku <jmbaku@weber.edu> wrote:

Government accountability to the people and the constitution are necessary for fiscal discipline. Unfortunately, it is very difficult to secure such accountability from governments whose primary source of income is not income taxes (that is, public revenues do not come directly from the people) but royalties from the exploitation of natural resources (such as oil). Where the bulk of public revenues are derived from royalties paid primarily by foreign or transnational firms, it is very difficult for citizens to check on the exercise of government power and force accountability. 

On Thu, Jan 7, 2016 at 9:45 AM, Oluwatoyin Adepoju <oluwasrividya@gmail.com> wrote:

---------- Forwarded message ----------
From: Alukoro Agbaye kakakiaye@gmail.com [NaijaElections] <NaijaElections@yahoogroups.com>
Date: 7 January 2016 at 14:33
Subject: [NaijaElections] What Nigeria needs now is fiscal discipline, not borrowing, says IMF Managing Director
To: NaijaElections@yahoogroups.com

 

What Nigeria needs now is fiscal discipline, not borrowing, says IMF Managing Director - See more at: http://www.bodedolu.com/#sthash.FHoaajNE.dpuf

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Posted by: Alukoro Agbaye <kakakiaye@gmail.com>

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JOHN MUKUM MBAKU, ESQ.
J.D. (Law), Ph.D. (Economics)
Graduate Certificate in Environmental and Natural Resources Law
Nonresident Senior Fellow, The Brookings Institution
Attorney & Counselor at Law (Licensed in Utah)
Brady Presidential Distinguished Professor of Economics &  John S. Hinckley Fellow
Department of Economics
Weber State University
1337 Edvalson Street, Dept. 3807
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(801) 626-7442 Phone
(801) 626-7423 Fax

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JOHN MUKUM MBAKU, ESQ.
J.D. (Law), Ph.D. (Economics)
Graduate Certificate in Environmental and Natural Resources Law
Nonresident Senior Fellow, The Brookings Institution
Attorney & Counselor at Law (Licensed in Utah)
Brady Presidential Distinguished Professor of Economics &  John S. Hinckley Fellow
Department of Economics
Weber State University
1337 Edvalson Street, Dept. 3807
Ogden, UT 84408-3807, USA
(801) 626-7442 Phone
(801) 626-7423 Fax

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