By Gabriel Zowam
Many years ago, the United States government was faced with the menace of used beer bottles, which littered its streets, as Americans simply “drank and dropped”! But instead of setting up a special agency and infrastructure for apprehending and punishing the offenders, government simply restructured the system: it put a 5-cent deposit on each bottle, to be refunded to the buyer whenever the bottle was returned. The result was dramatic: the empty bottles disappeared! It was not just that nobody wanted to lose their bottles anymore, but that some people actually started searching the streets for empty bottles, so as to collect refunds on them! Although the bottle-deposit system has become commonplace today, it was a very interesting reform, which propelled its own implementation, and thus guaranteed its success!
When people say that Nigeria’s problem is not with crafting good policies, but with implementation, the question is: What strategic lesson should our policy makers learn from that? The answer (incredibly) is from the woodworker, what he does all the time: he always repositions his wood, so as to work “along” the grain, instead of working “against” it! In my books, I call this the “woodworker” principle! Any policy (or reform initiative) crafted to work along the grain will propel its own successful implementation!
People are always highly motivated, resourceful, and creative whenever they are pursuing their self-interests, especially those self-interests that are harmful to the larger society. Our normal national response to such counter-productive activities (CPAs) is to fight them; and this naturally pits us against the zeal of the people concerned; against the flow of their wits, resourcefulness, creativity, and sometimes, even desperation!
A classic example of a system going “against” the grain is our present public procurement reform. Our Bureau of Public Procurement (BPP) has been pushing this reform very aggressively, since 2007. However, even with all its efforts, including the remarkable energy and enthusiasm of BPP’s Director-General, can we today say that our public procurement has become any less corrupt? The plain truth is that the reform can never work the way it is going, no matter the number of aid agencies that line up to fund it! And the reason is simple: We are hopelessly pushing it against the grain! It is on its way to our long list of reforms that consume a lot of resources, create new institutions, and sometimes, cause a lot of disruptions and pains; only for us to still have the problem that we started with!
Rather than always attacking a CPA head-on (i.e. going against the grain), we can restructure the system concerned (woodworker style) in a way that will enable us work along the grain, and leverage the resourcefulness of the system!
To further appreciate the concept of flowing “along” the grain, the world’s major systems of government (socialism and capitalism) roughly handle man’s natural tendency to be selfish. Man is basically a selfish creature, who is at his best, whenever he is pursuing his self-interests. Socialism tends to frown on this selfishness, in favour of a one-for-all and all-for-one society. On the other hand, the American capitalism, rather than seeking to cage this selfishness, tries to leverage it: It allows everybody to be selfish, to go ahead and pursue activities that are self-rewarding. But it structures its system in such a way that as each man is pursuing his self-rewarding activities, he will also be creating goods and services, and jobs and income for others; as well as wealth for the society as a whole! Without bothering about what we may individually feel about capitalism and socialism, let us appreciate how the American capitalism tends to leverage (rather than fight) the natural tendency of people to be selfish! In general, any reform or policy going against the grain will never achieve stability. Even if it starts out strongly (with a Nuhu Ribadu or Obi Ezekwesili), it will only be a matter of time before it loses steam! It will perpetually require an active infrastructure for enforcement, for pushing it against the grain of the system; and this must include the presence of an outstanding person, who cannot be corrupt!
In contrast, policies and reforms flowing “along” the grain create stable systems. The US Constitution is a classic example of this stability. During its over 200 years, the US has grown from 13 colonies to 50 states, and the population has increased by thousand-folds. The country has gone through economic booms and depressions. It has changed from an agricultural economy to an industrial economy, then to an information economy, and now to the globalised economy. It has fought major world wars. It has even fought a civil war, and abolished slave trade. Yet that constitution has been able to hold together, the enormously diverse interests of the American state, successfully handling the delicate balance of political powers, the separation of church and state, and so on. It has all this time successfully subordinated the awesome US military to civil control! Equally remarkable is that since their original constitutional amendment in 1789 (the Bill of Rights) only about 15 amendments have been found necessary! The inspiration, vision, and stability of that constitution have attracted millions of people from all parts of the world! Perhaps these American founding fathers were “woodworkers”!
More importantly, the implementation of a policy (or reform) flowing “along” the grain can be made “self-propelling”. A self-propelling system creates its own incentives for progressive improvement, as well as automatic consequences for failure to improve. For reformers, it is the “ultimate”! We can use our telecoms reform of 2001 to illustrate this. At least, three factors tended to make that reform self-propelling: First was the very competitive and relatively transparent bidding process: After MTN and Econet each paid a whopping $285 million as the licence fee, nobody needed to push them to be serious with building their networks: they on their own needed to work hard to protect this huge investment. Notice that if government had given Nitel money to execute the project or if the licences had been awarded to cronies at give-away prices, this self-drive would not have been there! The second factor was the business reward that awaited any of the operators that was able to roll out lines quickly. Such an operator stood to reap huge profits from jumbo pricing that they knew would progressively reduce as the market matured. We can recall that a GSM line, which is practically free today, cost as much as N20,000 in those early days; and that call rates which today can be as low as N10/minute were as high as N50/minute! The third factor was the limited exclusivity, which gave the GSM operators only a limited period, after which the market would be thrown open. So they needed to move fast! With all these, the industry had acquired its own internal incentives for improvement, as well as automatic consequences for failure to improve! Imagine the hectic board meetings and strategy sessions that must have taken place across Nigeria, South Africa, and the world by investors and telecoms practitioners, on how to roll out in Nigeria; i.e. on how to accomplish the precise goal government wanted for our telecoms industry!
But what is more important is how our ongoing transformation (power-sector and downstream-oil-sector reforms) must urgently leverage these principles!
Mr. Zowam is a reform & risk management expert