Big government ideology is to blame for our economic woes

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Endemic big government inefficiencies have contributed greatly to Kenya’s current economic crisis. [iStockphoto]

Treasury Cabinet Secretary Njuguna Ndung’u has urged Kenyans to prepare as 2023 will be a tough year economically.

As experts scramble to find ways out of the current economic crisis, one area that has received little attention is the legacy of big government ideology that is negatively impacting our economy.

According to conventional wisdom, it is assumed that our policy is not underpinned by any ideology, so we have even set goals in Vision 2030 to develop an ideological and problem-oriented policy.

However, while it is true that we do not have card-carrying, rabid Marxist ultra-conservatives, the public demands and resulting government policies reveal a consistent ideology rooted in the idea that government is our benefactor. and that the citizens are his ward.

Many attribute this view of government to a product of our traditional African governance systems where community affairs were centrally managed by a tribal council of elders.

To replicate this governance structure, Kenya’s nation fathers embraced a post-independence version of African socialism that is a blend of free market ideas accompanied by centralized planning and state ownership of enterprises. keys.

Over the years, the role of government has become even more pervasive, signified by increasing social benefits for the elderly, establishing universal health care for all, and providing affordable housing.

The centrality of government in the economy has also been reinforced by political rhetoric that consistently rests on the idea that government is responsible for the equitable sharing of national resources. As Kenya’s diverse communities are regionally distributed, the political imperatives of sharing the national cake fairly have reinforced the need for the government to continue to play its central role in the economy.

The recent visit to Nyanza by President William Ruto illustrated the extent of this conviction where opposition leaders came out in large numbers to appease a government essential to the development of their region.

Despite the cultural and political rationale, the high maintenance costs of a big, heavy government and its endemic inefficiencies have greatly contributed to Kenya’s current economic crisis. One indicator of the high cost of large governments is the public sector wage bill, which averaged 11% of GDP from 2006 to 2017, compared to an international benchmark of 7%. The disproportionate expenditure on the public wage bill is best illustrated by the emoluments of 429 MPs which alone gobbled up 32 billion shillings or the equivalent of the combined budget allocation to Nairobi and Kiambu counties with a total population of 6 .6 million.

On efficiency, a comment on the parastatals attributed to the PS Treasury says a lot. According to him, not only are most of Kenya’s 263 parastatals struggling, but most are bankrupt and only surviving on government bailouts. The shocking state of mismanagement and inefficiency has resulted in losses of 1.1 trillion shillings due to stalled projects.

Politically, the central role played by government in development and the general acceptance that it is indispensable to individual prosperity creates competition between communities to control the visible hand of government. This creates instabilities that are not only bad for the economy, but a real existential threat to the nation.

The argument that Kenya needs to change its underlying big government ideology to emerge from its current economic situation stems from these economic and political concerns. In mature democracies, the opposition offers alternative ideas to get the country out of the type of economic crisis we are experiencing.

In the United States, for example, the presidency alternates between leading Democratic and Republican administrations roughly every 10 years. The consequence of these political changes is to alternate economic policies between liberal and conservative ideologies.

In the absence of ideological parties, the Bretton Woods institutions and the donor community have provided the alternative economic ideology to mitigate the damaging effects of our big government mentality. In the 1990s, under pressure from conservative forces in the United States and Britain, Kenya was forced to accept structural adjustment programs that led to major spending cuts. Now the Ruto government is also under pressure for more fiscal support.

-M. Githieya is a political and economic analyst

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