One of the famous proponents of globalization, Thomas Friedman, once declared that “the world is flat”. His claim is that with the advent of globalization, cross-border mobility of capital has accelerated, with investment funds moving from one country to another instantaneously, in response to new business opportunities. Today, as never before in the past, economic growth should be within the reach of any country anywhere in the globe. All that is required for the seed of development to germinate, it would seem, is to have the door open to investment, together with an investor-friendly climate.
Evidence has, however, shown that the world might not be flat after all, with development continuing to elude many countries that have enthroned the supposedly required checklist for growth. If the usually prescribed conditions such as the rule of law, stable political and economic environments, haven’t transformed the under-developed nations, are there then possibly other ingredients for economic development, more far-reaching and subtler than the conditions usually prescribed, that touch on the national ethos and its traditions? In other words, could economic development be hindered by those intangibles that are collectively known as culture?
Why have some countries done very well, while others fail to develop, even when all the requisite economic factors seem to be in place? Why are countries like Indonesia and the Philippines, even with strong resource base and well-educated population, so resistant to development? What is there to explain the slow economic growth rates of the Pacific nations? How can we explain the repeated failure of African nations to utilize their resources to develop their economies even when there’s access to cross-border capital?
Most development economists might explain these inequalities by appealing to the list of conditions that must be met for an economy to develop. Good governance is seen as a prerequisite of development: the political system should be stable; laws must be clearly promulgated and enforced so that contractual agreements will be honored; and government officials should not be corrupt or inefficient. Moreover, land should be available at a fair rate for business opportunities; foreign investment should be encouraged; and the bureaucratic procedures for applying for a business permit should not be too onerous.
In his book, The Wealth and Poverty of Nations, David Landes, however, concludes that the success of national economies is driven by cultural factors more than anything else. Thrift, hard work, tenacity, honesty and tolerance are the cultural factors that make all the difference, he suggests. In his view, Max Weber was right after all in suggesting that social attitudes and values have the decisive say on what economies will succeed and which will fail. The development of a mindset, with accompanying values and habits, is a big part of the equation. Formal education may contribute to this, but possibly not so much because it imparts new information and hones skills as because it inculcates a new view of the world and concomitant values.
David Landes must have had Nigeria in mind when he drew up his list of the cultural factors that are prerequisite for national development, as those values and attributes seem to have been expunged from our value book as a nation. This conclusion is not encouraging for Nigeria. At one time, economists felt that sufficient capital, especially through national savings, might catapult nations into a flight path of economic growth. Lately, it has become more fashionable to focus on the institutions, political and economic, to ensure that the ground is prepared for the bountiful economic harvest to come. But a number of recent authors, proponents of the cultural dimension of economic development, are suggesting that the creation of such political and economic institutions may have taken centuries. Even once they are in place, there may be need for still further cultivation of attitudes and values before a country is fertile for economic development. It’s time to start building the right values as a nation, failure to do this will only see us puff and sweat, while economic development continues to elude us.
Olugbenga A. Olufeagba
