Wednesday, July 16, 2014


Was this the week that you applied for a job in statehouse?

Last week opposition chief whip MP Cecilia Ogwal brought to light a list that showed state house officials were earning up to a billion shillings a year in salaries. Frank Tumwebaze, minister of the presidency, however dismissed the list as erroneous and that his office had already brought the error to parliament's attention, as well as communicated the correct position. He accused the opposition of mischief in trying to score cheap political points with the commotion.

And with that we shelved our CVs.

That being said it would be bad economics for civil servants to be paid more than their counterparts in the private sector -- officially. It's a question of incentives.

"For sustainable development the incentive structure has to be slanted towards the productive sectors of the economy -- agriculture, industry and the private sector in general...

Governments do not create wealth. They facilitate the private sector to create wealth through the provision of public goods like national strategy, security and infrastructure.

Of course politics will always get in the way of economics. The political elite are motivated to capture power and once there hang on for as long as they can. Oftentimes this means dishing out goodies from the public trough, with loyalty not merit being the major criteria.

This happens everywhere.

In more developed economies the private sector is of sufficient size and organized enough to keep their governments in check and focused on their key role. Not an easy thing to do even there.

Maintaining that balance makes the difference between descending into a Zimbabwe-like situation where the economy's productive class has been totally decimated and there is greater competition to be in the ruling party's inner circle than there is to get private sector jobs.

Or being a Sweden, Denmark or Norway where the politics makes it possible for people to see ever improving welfare, while the private sector can also survive and thrive.

The private sector is not the panacea to our development ambitions, after all it can also run amok as it did during the recent global financial crisis and any number of economic crises in the last century and beyond.

In fact while the signal for regime collapse often shows up as increasing patronage, sucking resources financial and human capacity from the business community, trouble in the private sector often begins as the rich shift away from production to speculation...

The collapse of the Roman Empire and the lesser ones of Holland and Spain, was accelerated by this shift. A situation that observers now say is happening in the west or in the US more specifically.

This is not to begrudge statehouse officials an additional zero or a shift of comma in their take home pay, but it would bode ill for the economy generally if that were to happen -- officially.

But it is not impossible. For civil servants to get higher pay two things have to happen, one, that our tax base rises correspondingly and two, that government is cut to a more manageable size.


And finally the World Cup is set to come to a close tonight. It's been a month of delightful, free flowing football in Brazil, the spiritual home of the game. Amidst the flurry of goals, have been some shockers -- don't remind Brazil, some revelations -- Costa Rica? And confirmation of some old habits -- Luis "take a bite" Suarez, has he been vaccinated?

Invariably the cream has risen to the top. The finalists -- Germany and Argentina, between them have conceded seven goals through out the tournament and apart from Germany's flurry of goals against the hosts in the semifinals, both teams have not been particularly prolific in front of goal.

"At a fundamental level, especially for Germany its been a triumph of collective effort over individual brilliance. That systems and consistency trump the spectacular and solo efforts of the stars. While not pretty, with this systematic and egoless approach, the odds are that it will get the job done more often than not...

The Germans have the best record in terms of consistency in the World Cup in the last 40 years, making the semis or better eight of the last eleven events. There is a lesson for all of us.

Good luck tonight!

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