Commitment to bad rules have underdeveloped Africa read Kenya)

WHY is it that an over 100-year-old technology for lighting homes is still unavailable for many people in rural kenya, more so Luo-Nyanza where I was bred?

Indeed I remember a time in the late eighties. It was world-cup time. Names of Maradona, Luther Mathias and Rummeniger were rampant in people's lips each waking day. Ivory coast was Cote-de vour or something like that and they were a power house in african football. What is more they were in this particular world-cup. The eighties were a good time to live. I was five or so years old. We had this black and white television, a big black and white television that my father had bought in the early eighties from a diplomat, from Venezuela, I here, who had been recalled. The problem is we had no electricity. Meanwhile we had a neighbour who had electricty but no television. So my father gave him the TV for the duration of the world cup and occasiionally we would stroll by his windowside to catch a glimpse of football on television.

As a student in primary I schooled without elctricity either in the house or in the schoolroom. As a student in Secondary I enjoyed the illumination of electricity only because I was in a boarding school.

SO WHY IS IT THAT A CENTURY OLD TECHNOLOGY FOR LIGHTING HOMES IS STILL BEYOND REACH IN SOME RURAL VILLAGES AND HOMES?

I think that the failure is traceable to weak or wrong rules or laws or policies whatever you may wish to call them. You see, right rules can harness self-interest and use it to reduce want and poverty. Wrong rules stifle this force or channel it in ways that harm society.

But how do you free people from bad rules? If it was so simple, I would tell you.

WE know that in the 'developed' world it costs very little to light a home. We also know that most of the poor in our rurals are not starving. They could afford some light. Our rurals do not lack electricity because africans are too poor. Indeed, reliable power is so important for education, productivity and job creation that it would be more accurate to say that many in Africa are poor because they don’t have electricity. So why don’t they?

Consider development the other way round. US customers have cheap electricity mostly because rules channel self-interest in the right way. Some protect investments made by utilities, others stop these companies abusing their monopoly power. With such rules, companies win; efficient providers make a profit. But customers win too; they get access to a vital resource at low cost. It’s the absence of these rules that explains why many Africans don’t have electricity at home. It might seem a simple insight, but it took economists a long time to understand it.

In the 1950s and 1960s, economic models treated ideas as public goods, meaning that once one existed it was assumed to exist everywhere. Some ideas are like this—for example, the formula for oral rehydration therapy, the mixture of sugar, salt, and water, (ORS-which by the way I consumed alot growing up), that stops children dying from diarrhoea. No one owns it and you can find it easily online. If all ideas were like this it would be easier for poor countries to grow. But they aren’t: patents and other legal rules stop some ideas spreading, while others are just easy to keep secret.

Why doesn’t ideas common in some parts of the world spread to others? Some countries are better able to establish the type of rules that help good ideas spread, while others are trapped by bad rules that keep ideas out. The rules stopping cheap electricity, for instance, are not hard to identify. Political instability stops many electricity companies moving into rural Africa. Those that do set up there can exploit their power as monopolists to charge excessive prices that the poor can hardly afford. Good rules would stop all this. So to unleash the potential of the marketplace, poor countries need to find a way to create good rules.

However, how can a 'developing' country like Kenya, promise to keep the rules that govern investment fair? Rich nations use well-functioning systems of courts, police and jails, developed over centuries, to solve problems. Two people can make a commitment. If they don’t follow through, the courts will punish them. But many developing countries are still working their way down the same arduous path. Their leaders can fight corruption and establish independent courts and better rules over property rights, but such moves often require unpopular measures to coerce and cajole populations, making internal reforms excruciatingly slow.

What is more subsequent leaders may undo any commitments made by previous leaders. A faster route would seem to be for a developed country to impose new rules by force, as they did in the colonial period. There is evidence that some former colonized people are more successful today because of rules established during their occupations. Yet any economic benefits usually took a long time to show up, and rarely compensated for years of condescension and the violent opposition it provoked. Today, violent civil conflicts have led some countries to again consider military humanitarian intervention.

I END LIKE I BEGAN; WITH QUESTIONS WHOSE ANSWERS I DO NOT KNOW. WHY HAS AFRICA LAGGED BEHIND? WILL THE WESTERN HISTORICAL EXPERIENCE OF INDUSTRIALIZATION ONE DAY REPEAT ITSELF IN AFRICA?