INTRODUCTION

Since the end of World War II, we have been experiencing a worldwide struggle for the improvement of living conditions in the so-called developing countries. Suffix it to say that in the 1950s and 1960s, many Africans and indeed Nigerians believed that independence would change prospects for rapid economic growth and development (Mbaku, 2003:1). First, independence implied the end of colonialism and its despotic, exploitative, and repressive institutions. Second, with the Europeans gone, Nigerians could now engage in democratic (people-driven, participatory, and inclusive) constitution-making to provide themselves with dispensations that reflected their customs, realities, beliefs, values, cultures, and aspirations. Third, public policy would be focused on maximizing the objectives of the indigenous peoples. Fourth, the new governments, now controlled by Nigerians, would provide the enabling institutional environment for effectively managing ethnic diversity. Fifth, the new postindependence governments were expected to deal with historical injustices and provide all individuals, groups, and communities with the wherewithal to participate fully and effectively in economic growth and development. Finally, the new governments were expected to restructure property rights, especially in environmental resources, and achieve equity in allocation and sustainability in exploitation. Despite these arguments by our leaders, still failed to engage the citizens in comprehensive institutional reforms to provide incentives that maximized the creation of wealth, as well as the engagement of the indigenous people in productive activities. Instead our leaders undertook opportunistic reforms, which improved their ability to monopolize political power and use the state structures for their private capital accumulation activities (Mbaku, 2005). In the last two decades, scholars have begun to question the role of the African state in poverty eradication particularly the development of its people. These scholars (Ake, 1985; Wagner, 1988 and Mbaku, 2003) have sought to determine an appropriate role for the state in African societies. Traditionally, economists have assigned the state two main functions: (1) to maintain law and order, including the enforcement of contracts; and (2) to provide public goods. Suffix to say that during the last fifty years, the Nigerian state has not been able to perform these critical functions. Instead, government activities in the economy have promoted corruption and other form of opportunism and in the process, have exacerbated inequalities in the distribution of

resources. Thus, instead of serving as engine of economic and social development, the postindependence state has been transformed into an instrument for the capital accumulation activities of the ruling elites. Again, the issue that concerned our leaders at independence was the choice of a developmental model. The people had hoped that political leaders will choose a model that could enhance their living conditions. Instead, our leaders according to Krueger (1992) believed that poverty in the colonies had been caused partly by the reliance on markets for the allocation of resources. They then opted by design or default, to established two key and defective systems: sultanism and statism (Kuhnen, 1987:3). The latter been a development model that emphasized state control of resource allocation and minimized the functions of the market. More than forty years on, statism has failed to enhance living standards of the Nigerian people. Excessive government intervention in private exchange, coupled with state ownership and control of the means of production, has encouraged nepotism, corruption, rent-seeking and significantly stunted the creation of wealth (Leith, 1974; Le Vine, 1975). How did we get to this stage? And more importantly what can be done to address the excessive use of the state by a privileged few for private accumulation of wealth? In this study, we attempt to provide answer to this questions by exploring the concept of statism, its relationship with development and how statism has undermine the development of the Nigerian state. To do this, we have divided the paper into four interrelated sections. Section one which includes this introduction, theoretical perspectives on the term statism, development with a quick review of the statist theory of development. Section two examined reasons for the adoption of statist model in Africa and Nigeria, the state in development and we also assess the Nigerian state and developmental programmes since independence. Section three provides a critical analysis of the impacts of statism on Nigerias economic development. In our last section, we made concluding remarks and subsequently suggested some probable solutions. THEORETICAL PERSPECTIVES In this section, we attempt a review of the terms Statism and Development. To start, it is imperative to state that, these two concepts have no universally or commonly acceptable definitions. What exists is a plethora of definitions.

DEFINITION OF TERMS What is Statism? As a starting point, it is imperative to state that the word statism itself rarely occurs; the phenomena it connotes have certainly been widely recognized and discussed. The expression statism according to Poulantzas (1978) first emerged as such in France around 1880 to describe political doctrines that called for an expansion of the role and responsibilities of the state in all areas of the economy and civil society. He again asserts that the word was also used in Switzerland in the 1890s in the struggle to resist a proposed expansion of federal powers at the expense of the cantons, especially in the economic and financial domains. Nowadays, a usage of statism prevails that denotes the dominant position of the state vis--vis society, its individual domains, and the individual. Statism in the opinion of Jessop (2007) involves an enhanced importance of the state apparatus in securing the conditions for the valorization of capital at the expense of exchange relations and/or bourgeois political domination and at the expense of (always indirect) democratic forms of political representation. Again, statism means state hegemony in the economy and the direction of economic activity or development by the state through such devices as price controls, legislative acts, regulations, state ownership of the means of production and operation of state enterprises (Akhakpe, 2008:61). According to King (2003: 2), statism is a philosophy which consider the government as the most appropriate manager of the economy, and gives individual governmental authorities substantial power over fundamental economic activities such as entrepreneurship and innovation, product design and delivery, employment, and finance. He further reiterates that statism in itself is not corrupt. But breeds unique economic power, because government functionaries have such extensive authority over so many routine economic activities. What is Development? Again what constitute the term Development is relative. What constitute development in Third World Countries (TWCs) might not necessarily be referred to as development in the Developed or Advance Countries. For Sen (1999), development involves reducing deprivation or broadening choice. Deprivation represents a multidimensional view of poverty that includes

hunger, illiteracy, illness and poor health, powerlessness, voicelessness, insecurity, humiliation, and a lack of access to basic infrastructure (Narayan et al. 2000: 4-5). According to Seers (1969) the purpose of development is to reduce poverty, inequality, and unemployment. He further submitted that for us to consider development, we need to ask the following questions about a country's development:
What has been happening to poverty? What has been happening to unemployment? What has been happening to inequality? If all three of these have become less severe, then beyond doubt this has been a period of development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result "development," even if per capita income has soared (Seers 1969: 3-4)

In the words of Gauba (2007: 476), development may be identified as a process in which a system or institution is transformed into stronger, more organized, more efficient and more effective form and proves to be more satisfying in terms of human wants and aspirations. Thus Baran (1957) described development as a far-reaching transformation of societys economic, social and political structure, of the dominant organization of production, distribution and consumption. In other words, development means a conscious effort for the attainment of a specific goal. Having examined the two central concepts of this study, we attempt a review of statist theory of development in our next section. THEORETICAL FRAMEWORK In this section, we provide a review of the theory we find relevant for our analysis, which is the Statist Theory of Development. We have adopted this theory for reasons of convenience and conformity to our review of the role of the state. Statist Theory of Development Since emerging as a distinct school in the mid-1970s, statists have sought to rehabilitate and reemphasized the state as central to the study of politics (Almond, 1988). Pitted against pluralism, which emphasizes the role of interest groups, instrumental Marxism, which focused on the influence individual capitalists, and structural Marxism, which granted the state relative autonomy but continued to highlight the dominant position of the capitalist class, statists first attempted to demonstrate that the state could not be reduced to the sum of social interests and

that it was an important part of the political process. This according to Lake (1994:156) was accomplished both empirically, in the work of Stephen D Krasner reviewed in Gibbs, and theoretically, in the various studies of Theda Skocpol, Peter Katzenstein, and others-which was published in article form in the edited volume Bringing the State Back In. The statists developed a powerful theories of the state action by explaining why the state acted the way it did and how its actions affected policy. To this end the theory emphasizes the role of the state in fostering economic development. According to them, the modern state, with its high fiscal extraction capacity and high level of public goods provision, is able to penetrate, organize and mobilize the economy more efficiently for its purposes, militarily or otherwise (Weiss and Hobson, 1995). They also view state building and economic development as twin aspects of modernization. Modernization is a deliberate decision by some states that felt the need for it. That need is frequently geopolitical and military.

Source: Getty Image The statist theory of development studies the role of security concern in driving state intervention into the economy and state effort in economic development. They submitted that state is an organization. The "forces of execution" that shape the form of the state are one of the three determining forces, along with particularistic interests( the influence of social coalitions) and claims about the public good (the need to legitimate the state), of how states rule. To sum up, statists do not speak of government as a collection of bureaucrats, agencies, and limited constitutional powers but as the embodiment of the collective good-as the community itself. In the words of Forstmann (1998:36), government should make decisions for individuals. Since individuals usually prefer to make their own decisions, coercion and compulsion become necessary correctives. In our next section, we explore the rationale behind the adoption of this development model by Africans and indeed Nigerians. WHY STATISM IN AFRICA? As we have earlier stated, the period immediately after independence, certain trend in the continents political economy emerged. To be sure, most African countries opted for statism, a development model that emphasized government control of resource allocation, minimized the functions of the market, and granted the state significant power to intervene in private exchange, as well as to own and control productive resources. Eventually, the state came to dominate the economies of most African countries. Several reasons have been advanced to explain the choice of statism in post-independence Africa. Krueger (1992) and Decalo (1992) submitted that the following factors are responsible for the adoption of statist model in Africa. They include: First, many Africans considered the state as the most important actor in the war against mass poverty and deprivation, and were willing to grant it significant power to intervene in private exchange so it could aggressively confront poverty. Second, many indigenous elites of the time believed that the state was the only institution capable of reconstructing and rehabilitating societies and communities that had been devastated by colonial exploitation. Third, the state, now controlled and dominated by indigenous elites, was considered the only entity with the capacity to hold together competing ethnic and

nationality groups and provide the enabling environment for national integration, peaceful coexistence, and sustainable development. Fourth, development economists of the time argued that the state was the only institution capable of successfully organizing the large, highly expensive, risky, and complex development projects needed to meet rising public obligations and deal with poverty, as well as provide employment opportunities for a restless population and enhance the ability of these emerging economies to participate competitively and gainfully in the post-World War II global economy. Fifth, the general ethos of the period favored expansion of the welfare state and public management of the economy. Sixth, many of the continents new leaders had been educated in Europe, where social engineering and economic planning were popular ideas (cited in Mbaku, 2003:218). Again, during the early years of independence, the economic projects that were expected to generate the wealth to fight poverty, as well as to provide the masses with employment opportunities, were considered too risky and complex for what was essentially a highly underdeveloped and unsophisticated private sector. The new state was expected either to undertake these projects directly or provide large subsidies so that the private sector could organize them profitably. In most of the continent, the new governments chose to directly organize these projects (World Bank 1997). The drift toward statism was originally propelled by ideological and pragmatic arguments. Capitalism was misidentified with colonialism in one monumental error: Colonialism was evil and exploitative. And since the colonialists were capitalists, capitalism too was assumed to be evil and exploitative. Most African nationalists therefore opted for socialism, the antithesis of capitalism. Tanzania's Julius Nyerere stated as one of his principles of socialism that: "It is the responsibility of the state to intervene actively in the economic life of the nation so as to ensure the well-being of the all citizens" (Fieldhouse, 1986, 174). After 1967, the Tanzanian state became predominant in all spheres. The state took over all commercial banks, insurance companies, grain mills, and the main import-export firms, and acquired a controlling interest in the major multinational corporation subsidiaries and the sisal industry. In some countries such as Cote d'Ivoire and Nigeria, a large role for the state in economic development was envisaged for pragmatic reasons. A capital market did not exist due to the general state of under-development and only the state could marshal huge resources to lay down

infrastructure, such as dams, roads, and schools. In other countries, the African state was charged with "spearheading development that was neglected under colonialism" and "protecting the people against neo-colonial exploitation." Regardless of the rationale, however, virtually all African economic systems became primarily statist -- with enormous economic powers concentrated in the hands of the state -- and ultimately one individual. State intervention in the economy was pursued with a battery of controls on prices, exchange rates, interest rates and other economic variables. But they had serious unintended consequences. If in an attempt to improve the living conditions of its people by intervening in the economy, the state failed. Does it imply that the state has no role to play in its economy? We are again led to ask what is the role/place of the state in development. To provide answers to these questions, we review the role of the state. The State and Development The discussion on the role of the State in development is part of a larger debate on the overall role of the State. Generally speaking, and as has often been pointed out, the pendulum has swung sharply. A few decades ago, it focused on the idea that it was possible to conceive of a State that would comprehensively plan all aspects of development and implement those plans through its own machinery, carrying out those operations from the centralized level and assuming all types of executive functions (The Economist, 1996). Kauzya (2005:2) corroborated this position when he submitted that the State is a critical player in the development process of any country. In practice, this view proved to be seriously flawed, both in its conception - which underestimated or marginalized civil society in its many manifestations - and in its implementation, as major inefficiencies in the State machinery became apparent and the centralized management style turned out to be a key source of rigidity and of serious discrepancies with the exigencies of reality. The pendulum then swung in the opposite direction, and the need for "State minimalism" was postulated. It was asserted that the State's functions should be kept to an absolute minimum and that development should be left to the market and the "invisible hand". Jefferson (1801) reiterates this when he submitted that: a wise and frugal Government which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits

of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our own felicities. (T. Jefferson, 1st Inaugural, 1801, Memorial Edition; 3:320). The central conclusion of this recent literature is that Jefferson was largely right. Not because a minimalist state is necessarily better than a big state. But because the key challenge for most developing countries and Nigeria in particular is to create the basic legal and institutional infrastructures that protect property rights, enforce private contracts and allow individuals to freely take advantage of market opportunities. In principle there are many more things that the state could and should do: provide public goods, correct market failures, reduce inequalities in income and opportunities, stabilize excessive economic fluctuations. But these other state activities are not what make the difference between success and failure in development. The real difference is made by the basic institutional and legal infrastructures that protect property rights, enforce the rule of law and prevent abuse by state officials. The State was perceived as an obstacle to the dynamism that was to be created. Much was made of the supposed antagonism between State and market. An active process of demolishing the State was pursued in developing countries. For a long time, efforts focused on the issue of size, as continual and often not very selective cuts were made to reduce it. Many of the State's functions were abolished. In several cases, attempts were made to privatize and to eliminate functions as quickly as possible, even though it was acknowledged that the operations concerned could have been carried out more efficiently for the country's sake and that the public regulatory capacities which supposedly would be needed for the next phase were very weak or nearly nonexistent. The Nigerian State: An Assessment Can the conception developed here be applied to the Nigerian state? How have the contradictions of state reproduction been in evidence in Nigeria? How has stateness changed? Has the nature of the Nigerian state changed in recent history, or is the Nigerian state, as radical critics allege, still the same state that it was in 1960, even though the occupants of high office have worn aqbada and uniforms, social groups risen and fallen in power, and the structures of the state been reorganized drastically?

There is little disagreement among observers about the basic contours of the political economy of Nigeria. To borrow from Diejomao (1981) the tone in which Nigeria is described may vary from outrage and despair to faint hope; words and rhetoric reflect ideological disposition, theories, and judgments; yet descriptions of power, privilege, and political processes differ little. Nigerian society is characterized by an overpowering statism which inextricably intertwines political and economic power. The line demarcating politics and economics has been erased as state power equals wealth and wealth is the pathway to power (Rimmer, 1985:143) Economic life has become politicized, and politics is most fundamentally about the distribution of wealth rather than considerations of the public weal. "The salient feature," argues Ake (1981), "of the state of the nation and the crux of the problem of Nigeria today is the over-politicization of social life. The Nigerian state appears to intervene everywhere and to own virtually everything including access to status and wealth. Several measures have been adopted by government to promote this phenomenon. First is the marketing board system of the 50s to facilitate the production, processing, pricing, export and development of agricultural products in Nigeria. Again, we had the indigenization policy of the 70s which was aimed generally at promoting the entrepreneurial ability of Nigerians. Not forgetting the various National Development Plans which were meant to help generate confidence in the basic strength and resilience of the Nigerian economy and enhance its potential credit worthiness abroad (cited in Ologbenla, 2007). Also, we had the following; Land use reform of 1978, Structural Adjustment Programmes (SAP) of the 80s, the Poverty Alleviation Programmes (PAP) in the year 2000 which later metamorphosed to the National Poverty Eradication Programme (NAPEP) and of course the popular National Economic Empowerment and Development Strategy (NEEDS) of 2004. The state in Nigeria became a big man. But they had serious unintended consequences. Besides the shortages state controls created, officials administering these policies quickly discovered that the byzantine maze of state controls and regulations provided rich opportunities for self-aggrandizement. Revenue collection, passport control, and even government stationery could all be diverted, manipulated or used for illicit personal gain. Civil servants could demand bribes, exploit their positions in government, and manipulate the state's regulatory powers to supplement their meager salaries. Almost every

government regulation and nuance of policy could be "exploited." "Because every permit has its price, Nigerian officials invent endless new rules. A guard outside a ministry demands a special permit for you to enter; a customs inspector invents an environmental regulation to let in your imports; an airline official charges passengers for their boarding cards" (The Economist, August 21, 1993; Survey p.5). Between 1970s-80s, a rash of military coups swept across Nigeria, throwing out of office the corrupt politicians. But the so-called military "saviors" themselves succumbed to the graft and corruption. Gradually in place of "government" evolved a "vampire" state -- a government hijacked by uncompromising gangsters and seasoned crooks, who use the instruments of the state to enrich themselves; their cronies and their tribesmen. All others, the majority, are excluded (the politics of exclusion). The richest persons in Nigeria are heads of state and ministers. Often, the chief bandit is the head of state himself. "Politics [in Nigeria] is seen as a way of gaining access to fantastic wealth," says Beko Ransome Kuti, a frequently jailed civil rights leader (The Economist, Aug 21, 1993; Survey p.6). In essence, state led development projects or programmes rather than alleviate the living conditions of the people in Nigeria, it has if not worsen underdeveloped the nation. So what are the consequences on the Nigerian economy, her people and development? IMPACT OF STATISM ON NIGERIAS DEVELOPMENT There is no doubt that the government has made efforts to promote economic development through various measures. Some of these measures have brought tremendous changes to the socio-economic and political fortunes of the country. According to Akhakpe (2008) the modest development the country has recorded since independence owe much to the state role in the economy. Yet our position thus far is that the phenomenon of statism has become endemic in the Nigerian state. It pervades every aspect of our social, economic and political lives. It is against this backdrop that we put forward the following as the consequences of this menace. Research has shown that those exploited by the vampire state are eventually driven to exercise the "exit option": Leave or reduce their exposure to the formal economy by smuggling and taking their activities to the underground economy or the black market. This deprives the state of tax revenue and foreign exchange. Over time, the formal economy progressively shrinks and the state finds it increasingly difficult to raise revenue as taxes are massively evaded, leading the ruling vampire elites to resort to printing money and inflate the economy.

Excessive emphasis on the state sector resulted in a total neglect of the private sector. Not only did post-colonial Nigerian governments ignore the private sector as they searched for ways to support inefficient SOEs, they also undertook policies that significantly increased the costs of operating in the private sector and thereby forced many enterprises to enter the underground economy or informal sector. The subsequent reduction in national tax bases resulted in major shortfalls in public revenues, forcing many of these countries to seek official development assistance from the World Bank and other multilateral agencies. Another consequence is the starvation of income-enhancing investments. Equal opportunity means that individuals have access to good education and health services, that their safety and property have equal protection under the law, and that they have some degree of access to capital to finance sound economic activities. The advancement of equal opportunity is one of the most important roles of government, and it is achieved through a wide variety of programs, all of which require serious and sustained investment of public resources. Nigerian statism starves economic development programs of funds, because so much of what the state collects in revenue remains inside it, to cover the personnel and overhead costs of its administrative operations.

Source: Central Bank of Nigeria Annual Report, 2002

Statism breeds mediocrity and inefficiency in the provision of government services and the effectiveness of government institutions. Statism diverts public resources into unproductive control and administrative functions. Nigerian public utility and infrastructure services are remarkably weak for a country which is the worlds sixth largest oil exporter. Its public electrical generating capacity is less than that of Bosnia, an underdeveloped Balkan country with approximately one twenty-fifth Nigerias population. Eighty percent of rural households in Nigeria lack an electrical connection, and one-half do not even have running water. Power outages are an everyday occurrence throughout the country, and as a result all significant businesses must purchase backup generators. The transport infrastructure is extremely poor. The rail system, once good, now barely operates, so that almost all commercial freight must be moved by roads. A final and perhaps most destructive characteristic of Nigerias statist, rent-seeking culture is that it creates an enormous barrier to progressive change. Reform threatens the institutional mission of a large swath of Nigerian government, even if well-meaning. It threatens the access to wealth of thousands of more or less corrupt individual government authorities in rent-extracting positions. There is no upside in change for these agencies or individuals. The statist agencies would be out of business, and the rent-seeking individuals would lose their pipeline to free cash. It is very difficult to achieve reform when those affected by the change process are out to sabotage it. This is an enormous problem for Nigeria, because the culture of rent-seeking statism is so thoroughly entrenched, and so much self-interest is tied up in it. This makes it difficult to attack the problem head on. CONCLUDING REMARKS/SUGGESTIONS From the foregoing analysis, it is clear that the underdevelopment posture of the Nigerian state are humanly induced. It therefore means that organized statism does not happen by itself; it must be created and reproduced by human agency . The state does not exist in any particular form or nature because of some presumed functional need of systems, but by the actions of individuals and groups as they struggle to promote their interests and the values they hold dear. Therefore, for us to have a turn around, we suggest the following measures be taking:

First, programs must be devised that dilute statism and make rent-seeking more difficult, regardless of the resistance of vested interests. More importantly, the countervailing force of popular demand for reform must be mobilized and brought to bear. Statist rent-seeking must unavoidably be addressed by the development effort. Whether or not a proposed program attacks it must be the first litmus test of its value. Second, there is the need for government to recognize the place of the civil society organizations and other agents development in the drive towards uplifting the living conditions of the people. For example the Build Operate and Transfer (BOT) of the Lagos State Government in the area of service delivery and also the Liberalization of the Telecommunication industry in Nigeria which has recorded tremendous growth. This model can be introduced into the delivery of socioeconomic goods services to the people. This will however require sincerity on the side of people in government. Third, is the need to rebuild the State with the aim of creating what could be called "smart government"; in other words, government that focuses on its strategic roles in society, with an institutional design and a development of managerial capacities that enable it to play them in a highly effective manner. A wealth of evidence shows that one of the key roles of "smart government" will be in the field of social re-engineering in terms of attitude and behavior of its citizens. To achieve all of these, our leaders need to demonstrate leadership qualities that will signal to their partners and collaborators the zeal to administer development projects and programmes effectively. This in our opinion will serve as a motivator for them to exert their skills and honesty in pursuing the goals of the state.

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