By XN Iraki
Bad leadership has been Africa’s soft underbelly. Most people believe that if only we had good leaders, we would grow our economy, enjoy higher living standards, live longer and be happier.
If this is true and there is overwhelming evidence to support this notion, why do we fail to elect good leaders despite regular polls?
An economic explanation into bad leadership could hopefully spawn a new crop of leaders. George Akerlof, winner of the economics Nobel Prize in 2001 and Joseph Stiglitz, a one-time lecturer at the University of Nairobi, in their ‘analyses of markets with asymmetric information’ shed some light into the economics of bad leadership.
The most sighted work by Akerlof is about the lemon problem. Not the lemon you know, but another term for a low quality or bad car. Akerlof in his 1970 seminal paper noted that “if consumers cannot tell the quality of a product and are willing to pay only an average price for it, then this price is more attractive for sellers who have bad products than to seller who have good products — hence the term adverse selection.
Consequently, more bad ‘lemons’ will be offered than good ones.The same often applies to market for leaders. In the political market, the consumers (voters) cannot tell the quality of the product (potential MPs, presidential candidate etc), so they are likely to select the bad one.
The problem is that we cannot be sure political players are giving us all the information. Telling too much would be risky to anyone aspiring for a political office at whatever level.
Here comes the other problem. If you go to the car market that Akerlof was referring to, you realise that people selling bad cars, newly painted talk most.
People selling new and relatively well maintained cars do not talk as much. The same applies to political leaders at any level. Those who talk most, usually the ones, who have something to hide, end up being elected as leaders.
We could also argue that the voters or consumers are attracted more by cheap talk than serious talks that focus on matters likely to influence the nation’s long-term prosperity. Please attend a few political campaigns.
Akerlof’s argument suggests good leaders are driven out of the market. And why not, they are likely to find it is too expensive to pursue their political ambitions (like selling a good car among bad cars), in terms of their reputation and even money.