The Economic Costs of Election Cycle Politics

In 2015 Nigeria’s general elections reportedly cost the economy an estimated $625m for 67 million voters according to a certain infographic by Ali Geidam. In the previous year (2014) India’s election reportedly cost $600m for 815 million voters. This comes to about $9 per voter in Nigeria and 7 cents per voter in India. There may be something fundamentally wrong with Nigeria’s pattern of election cycle politics and it clearly does not befit a sinking nation. What does elections cost a nation? In practical terms who really bears the cost?

If we proof that elections could lay the negative precedents for economic stagnation/regression – at least in our own context – then it becomes very imperative to rework it. The real economics of elections may be of little consequence to the political class from a strategic perspective, but a patriotic review of some of its hidden impacts on citizens and the economy, justifies a thoughtful inquiry. On the frequency and form (scope if you like) of elections, a nation in Nigeria’s shoes should ask many questions.

It appears that the only reason why Nigeria holds general elections every four years is because it’s the practice in US, Britain, France and any old democracy you may think of. That constitutional culture may have worked for those who originated it, but its proofing too expensive for those who now copy it.  A school of thought in political economy opines that “elections lead to income redistribution, less capital accumulation and lower economic growth”. That could be Contestable? but If we were to proof this, then why should a developing and economically regressing nation organize this party every four years.

INEC’s budgetary allocation in 2014 valued at N87.8 billion is projected to be enough to build 110 cancer radiotherapy centers at N800m each (Nurudeen Abdallah).  It’s obvious that if the interval for elections in Nigeria where farther spaced, there will be apparent cost savings. These costs reflect only direct costs. There are indirect costs of election as well, which includes the developmental opportunity cost (reflected in the time lost) and the strategic distraction from governance – in which cases Nigeria is a top scorer.

While social scientists and political economists are still exploring the summative impact of election cycle politics on national economies, with divergent schools of thought postulating progressive and regressive impacts in some cases; Its more obvious that majority of the available literature/data will represent studies conducted in the West, (or at least other developed nations) where national development is neither an exigent nor a critical task and where available finance, time and resource can be conveniently earmarked for secondary concerns.

There is no gainsaying that elections are the bedrock of modern democracy and it provides a framework and vehicle for delivering and sustaining certain institutional elements of society and governance. However, exploring the real economic cost of election cycle politics in Nigeria brings a lot of questions to fore. It challenges the economic justification – in a developing economy – of a four year term that ends as soon as it starts; it strongly questions the size of government at the major tiers, with respect to their roles and impacts.

Now we are the poverty capital of the world; has one of the world’s poorest qualities of power supply (being second only to war-ravaged Yemen) and one of the world’s worst education and transport systems. But we still believe it makes sense to reconvene every four years to elect new leaders at all levels. And that, within a chain of activities that typically takes no less than 12 months to prepare for, which aptly mirrors a year-long party or jamboree.

On a cursory look, it appears that the about $625m that was reportedly spent/circulated in 2015 general elections within Nigeria, should have nudged the economy forward. But the truth is that those expenses or redistributed income that could have positively contributed to improving the Social Overhead Capital (SOC) – infrastructure, road, communication systems and other utilities that directly aid business – are rather targeted at frivolities, often under very corrupt circumstances that will largely elude the lawful market. This amounts to desirable income redistribution without capital accumulation which becomes undesirable.

For those who argue otherwise, to proof that Nigeria’s huge election expenditures help grow the economy will require a Difference-in-Difference study that compares economic indices before and after the election. Until that hard data emerges, experience and visual econometrics is already providing us some scary outputs.

We see electoral violence and its costs, (contrast this with more peaceful conducts in saner climes), We see distractions from governance and its costs, comatose enterprises and its unemployment cost and limited appetite for local and foreign investment that is fed by the fear of policy shocks and political instability. The list could actually be longer.