HOW PERVERSE INCENTIVES IS A POISON CHALICE TO A COUNTRY'S ECONOMY?

 If you wonder why , most African States are poor yet they are endowed with more resources that are enough to alleviate their people from abject poverty and untold and ravaging hunger and poverty is because , with all this resources at their disposal , they lack goodwill and plan. To them , they don't understand what is economic development and economic growth. To them , the two are one and the same thing and to the few who see there is a difference , they define the two terms interchangeably. With a pool of policy makers , the continent just comes up with cosmetic solutions to the problems facing them since , poverty in Africa is commodified and a political fodder for the political elites to continue dominating their hoi polloi masses so as to continue enjoying the state largesse with no iota of shame and mercy.

Inorder to show that they care for their people , they always come up with perverse incentives as their number one economic policies and stimulus. For starters , a perverse incentive is an incentive that has an unintended and undesirable results that is contrary to the intentions of its designers. The cobra effect is most direct kind of a perverse incentive. This incentives are formulated by political elites in n attempt to hoodwink their citizenry thst , they are caring for them. Like now in Kenya , the problem of drought and famine has ravaged most parts of the country and mostly the arid and semi arid regions. The government is in an attempt to solve the issue. It is disturbing relief and also telling well-wishers to join in doing the same inorder to arrest the situation and save the millions of lives from starvation. Here comes a perverse incentive that , those people in drought ravaged regions will have monies wired in the MPESA accounts to purchase food which isn't available. Take this irony , the British oil drilling company Tullow oil carried out a hydro geological survey in Turkana County and reported , the acquifer underneath can produce millions of gallons of water that can be used for the next 100 years. What does that tell you? Hunger isn't a natural disaster but something that can be beating if sober heads are at the helm of political governance.

Origin of this term

The phrase Cobra effect comes from a story about the British colonial goverment in India. In 1900's , when the British Colonialists ruled India , they had a major problem which was cobras. This problem was in New Delhi , the capital and the administrative city of the British colonial goverment. The British government tried to tackle the problem on this venomous cobra snakes by offering a bounty for every deaf cobra. In response , enterprising locals started breeding cobras for income. When the government became aware of this , it cancelled the bounty programme which resulted in the Cobras being released or let loose into the streets of New Delhi as they were worthless without the bounty system. To prevent this from happening again , the British government required that all snakeheads be presented with the skin still attached to prove that they had been freshly killed. People began collecting the dead snakes from around the City and sewing their heads back on before turning them in to be paid.

The British colonial goverment was forced to cancel the program altogether which caused the snake population to return to its previous state and then increased to leading the population of cobra population to rise into monumental proportions. This concept was put forward by a German economist Horst Siebert. It is widely used in the West and the East but in Africa, it is used as a tool of advancing the economic policy directives and formulations instead of cautioning them from using such perverse incentive programs in addressing very serious Economic issues. The cobra effect is used as an example of unintended consequences. It also highlights why it is important to think and reason through solutions before taking action and why implementing policies without fully understanding their implications can be disastrous. This is exactly what the current Government want to take us through. President Ruto should be very vigilant and alert. We know he isn't an economist but a botanist by profession and on matters economic policies , thst is fiscal and monetary , he will be advised by a pool of economists in his disposal. He should not be consuming advise from only one source and the problem can be , he may have the best economic advisors but fail to hearken their advise judt like president Moi used to do. Or have the most incompetent, inept and mediocre Economic advisors at his disposal and ends up implementing policies like the ones the former Sri Lanka president Gotabaya implemented and eventually deeped that country into the abyss of Economic desolation.

The County Goverments too should not come up with perverse incentives in their quest to address deep rooted economic and social problems facing their people especially in programs aimed at poverty eradication. Before any initiative is brought forth and implemented, serious Economic simulation must be conducted to a certain its applicability and veracity. Not coming up with economic policies that , instead of solving a problem , it ends up making that problem to excerbate to astronomical levels. Let the county government shows itd people how to fish and not necessarily giving them fish. Of it is giving them subsides in farming inputs, lower business licenses and othrt bottlenecks that make both agriculture and business an expensive venture. We have seen since the inception of devolution, Governors coming up with white elephant projects that had small or zero impact on their people. Like my County, we had one youth one cow , the sweet potato tubers project , the wachuuzi sacco shenanigans that were just cash cows too loot from the taxpayers.

In conclusion , a goverment that seriously cares for its people ,it must come up with sober Economic policies that sre aimed at eradicating their problems once and for all. It must come up with long term solutions not short ones inorder for the same problems to replicate themselves again and the very goverment comes up again with short term solutions and the buffoonery cycle repeats itself for 5 years. This happens when poverty and hunger becomes commodified items and as tools of oppression and fodder for political expediencies. That ends up being a zero sum game. Poverty and hunger aren't spiritual and religious problems. Zero!!! They are political , social and economic problems and with this , they require political and economic goodwill from the existing goverment to be alleviated. Perverse incentives aren't a panacea to the many problems bedevilling out Country and the continent as a whole. They are just problem incubators and with this , no tangible solutions with ever be achieved. Painful truth.