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Let us be selective about the social welfare model

By Otieno Odhiambo | October 9th 2018

The power of the Government to tax or force us to contribute to a kitty of their choice is not debatable because the State through the national Assembly will always have its way.

They have increased the value-added tax (VAT) on paraffin and are forcing us to contribute to a housing fund.

I have always wondered why as a nation we fight about constitution making.

Could it be that we are illiterate or is it our greed that destroys us? Is it possible for us to approach crucial issues with the same spirit of compromise that our forefathers relied upon when fighting for our independence.

Kenyans feel that Parliament has failed in its mandate and as one American declared, ‘Our system of checks and balances cannot eradicate the politics that often make our government ineffective; the power to do that rests squarely on the shoulders of the politicians we elect.

Blaming the Constitution for the ineffectiveness of our politicians removes accountability from those responsible.

The debate should now move to whether any allocation of resources collected by Government is efficient i.e whether resource allocation maximises our social welfare.

Borrowing and wastage

The debate about Government allocation of resources is always lost in the discussion about corruption.

The debate has been about borrowing and wastage.

Every time we question State action, our response shows how corrupt we are.

To solve our problems, we must recondition the constitution. My argument is that reviewing the constitution in a vacuum will not work for us, and recreating the constitution for personal interest will not lift many of us out of the current economic mess.

It is true that our politics are depressing, but I do not think to alter our Constitution is the solution.

A referendum is costly. It needs a carefully thought of cost-benefit analysis. Our solution will be found in a well-thought welfare economics model, devoid of substandard politics. The question that should be in our mind is whether our allocation of resources is efficient or not.

We are efficient if the allocation of our scarce resources maximises our social welfare.

 Thus, our first action is to understand what welfare economics is all about and establish a criterion to assess economic policies from the social welfare perspective.

The basics of social welfare of nation reside in practices, laws, rules, and compromises that improve the lives of the citizens. Examples of social welfare policies are those that ensure better housing, better healthcare and comfortable transport for citizens.

Economists say the allocation of resources will be efficient if social welfare is maximised. This is due to irrationality and rationality in the minds of those who want the constitution reviewed, and those opposed to the review.

Kill tribalism

Let us define our social welfare agenda and put in place a constitution that supports that agenda, otherwise, we will make a constitution in a vacuum.

We must, therefore, define social welfare as the satisfaction of all the individuals in our country. That line of thinking will kill tribalism because the welfare of all Kenyan is factored into our social welfare model. However, we must be selective about our social welfare model.

When the State decides to deduct 1.5 per cent of our income without consulting us,  that is paternalist because bureaucrats are wrong in assuming they know and own our social welfare.

The ideal social welfare model is one in which if the welfare of an individual increases, no other person(s) is made worsened off.

The way our current system works is that some are made better off while some remain worse off.  However, this ideal social welfare model can be modified by value judgments to get us where we should be.

Informed citizens must reject the paternalist’s concept of social welfare, by insisting on being consulted.

They must be involved in deciding what is good and bad for them. We need a monthly complex index that captures and report our social welfare status. Our revised constitution must be deduced from social welfare propositions.

Hopefully, we will introduce economics as a subject in primary schools.

Maybe we are wanting in terms of cost-benefit analysis because we aren’t conversant with economics.

-The writer teaches at the University of Nairobi  

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