According to the economist magazine, economists became fascinated by the rule of law after the crumbling of the â€śWashington consensusâ€ť which was economic orthodoxy in the 1980s holding that the best way for countries to grow was to â€śget the policies rightt on subjects like budgets and exchange rates. However, the Asian crisis of 1997-98 caused economists to re-examine what had gone wrong with the so-called Washington consensus. The new conclusion now is that if the rules of the game are a mess no amount of tinkering with macroeconomic policy would produce the desired results. This conclusion clearly explains what has happened in many developing countries, especially here in Nigeria and much of Africa. Policy makers typically get the policies right in formulation, but very quickly poor governance and the absence of the rule of law begin to undermine all efforts.â€ť So as the economist magazine has stated it, governance, that is political accountability and the quality of bureaucracy as well as the rule of law have now become the big issues for speeding economic growth and ending underdevelopment. Economist Daniel Kaufmann and his colleague Aart Kraay have worked out the so-called â€ś300% dividendâ€ť. What this says is that in the long run, a country's income per head rises by roughly 300% if it improves its governance by one standard deviation. For none statisticians don't worry about this thing with standard deviation. All we said is that if the governance value is just a little bit much better then the average value, the countryâ€™s income per capita can rise by as much as 300 percent. For example, One standard deviation is roughly the gap between India's and Chile's rule-of-law scores, measured by the World Bank. As it happens, Chile is about 300% richer than India in purchasing-power terms. So folks, what we need is simply to follow and enforce the rule of law. It will help us to raise the level of living. I am Magnus Kpakol and that's my view.
Posted: Aug 8th, 2017 @ 06:33:56 AM