There are at least two important things to consider when examining the developmental trajectory of states when it comes to corruption. The first is that there are different types of corruption. The second is that the international community—at least through its media—looks on some types of corruption less favourably than others. But, this is sometimes misplaced.
The Cost of Corruption
If corruption affects a country’s economy, one possible avenue is through transaction costs. We understand from the work of the American economic historian Douglass North that legal and regulatory stability, or a lack of it, affects a country’s economic performance. It affects the ability of business to efficiently and effectively calculate the cost of transactions.
North argued that the development of rule of law institutions, for example, is what enabled economic development in the UK. Business innovators could work in an environment where the cost of business can be reliably calculated and legally maintained. But this has not meant that countries such as the UK are free of corruption. They are merely corrupt in a way that does not overtly hamper economic productivity.
Indices such as these are questionable given the possibly dubious measurements involved in producing them. Nevertheless, this type of hard-to calculate corruption practised in countries like Nigeria likely affects economic growth. The fact that both domestic and international businesses cannot accurately calculate the cost of doing business in Nigeria makes them jittery at the best of times. Investors and business people put a premium on stability, credibility and predictability.
But that is not the same as saying that Nigeria is any more corrupt than any other country and that such corruption is the cause of its poor economic development.
The kind of corruption that takes place in countries like Nigeria is perhaps comparable to the patrimonial corrupt practices that were prevalent in feudal Europe and the wars that built its states. Historical examination tells of a people not significantly different in behaviour from their modern day Nigerian counterparts. As Charles Tilly, the American sociologist and political scientist notes, the European experience represents “one of our largest examples of organised crime”.
