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The cost of State capture

In 2019 alone, it was reported that the government could not account for approximately Sh731 billion. #StateCaptureKE @IBP_Kenya
@TISAKenya @TIKenya

By Luis Franceschi @dailynation

The crippling state capture scandals we have discussed in the previous weeks do not happen only in Kenya. #StateCaptureKE

Goldenberg and Anglo Leasing were locally assembled, but external interests are also at play as we learnt from our study of the Standard Gauge Railway. #StateCaptureKE #SGR #Angloleasing #Goldenberg
State capture is an international phenomenon. International capture is the overflow of national moral decay in governance. It never stays indoors and sooner than later spills over to neighbours ….to the whole world. #StateCaptureKE @katibainstitute @ICJKenya @irck_info #KOT
At the heart of all our discussions, is our institutions’ weakness. We have seen the law’s porosity when confronted by private interests and the resulting corrosion of the rule of law in the generalised rent-seeking environment prevalent in today’s environment. #StateCaptureKE
How much have we lost? To be clear, what we will see below is the cost of weakened institutions; of decades of contempt for the rule of law; and of poor governance. #StateCaptureKE #FridayThoughts @KRACare @DCI_Kenya

The cost of theft

Despite the fact that we are unable to fully quantify the loss occasioned from decades of unbridled institutional capture, we use “corruption” as a metric to attempt an evaluation of its cost. #StateCaptureKE

@TrackTheCorrupt @UNDPGAIN @corruptkenya @corrupt
Between August 2018 and November 2019, reported unaccounted-for funds hit the astronomic figure of 972 billion shillings. #StateCaptureKE @CBKKenya @AfUncensored @AmnestyKenya @ZindukaFestival
In 2019 alone, it was reported that the government (both national and county) could not account for approximately Sh731 billion. #StateCaptureKE @TIKenya @Accountable_Org @CMDKenya @thekhrc @YWFkenya @CSRGKenya
This figure is a consolidated amount from various accounts including the auditor-general’s reports. This loss was caused by numerous scandals such unaccounted-for funds reported by the auditor-general in NSSF’s, KRA’s, KPC’s, and NYS’s finances among others #StateCaptureKE
The figure below illustrates how much was reported as unaccounted-for, every month in 2019. In June of 2019, the reported amount totalled 293 billion shillings; four billion shillings shy of what was reportedly siphoned off between August and December 2018. #StateCaptureKE #KOT
It is fascinating that the greatest aide to corruption politics is rooted in the evolutionary theory. #StateCaptureKE
The human brain is unfortunately not evolved to process big numbers. Our natural tendency, when confronted by big numbers, is to see whatever is in question in relative terms. #StateCaptureKE #FridayThoughts
Our ability to keep track of numbers decreases as the numbers increase. It is known as scalar variability; the bigger a number gets, the noisier and fuzzier your estimate gets. #StateCaptureKE

Consequently, our minds are obfuscated by the types of numbers synonymous with corruption scandals because we are naturally not predisposed to make sense of them. #StateCaptureKE #FridayThoughts
The result is that we are collectively shocked at the audacity of those involved in the graft. We are angry at all this theft, but we are incapable of wrapping our minds around the loss because we naturally balk at the sheer magnitude of the numbers reported. #StateCaptureKE
For the purposes of understanding the loss, we have contextualised it. The sum of Sh731 billion lost in 2019 means almost nothing until we understand what the country could have done with that money. #StateCaptureKE #FridayThoughts
For those struggling to meet the increasing cost of cancer treatment, Sh731 billion would have bought 1,827 of the newest radiation therapy machines known as the Varian Halcyon Analysis Treatment Machines #StateCaptureKE #Cancer #Movember @fnoluga @Dr_chitayi #FridayThoughts
'Each county would have had 38 radiotherapy machines'

These machines are designed to deliver an entire adaptive treatment in a typical 15-minute timeslot, from patient setup through treatment delivery and each county would have had 38 of them. #StateCaptureKE @TheKisiiCounty
If we set Hon. Ken Okoth’s Mbagathi Girls' High School as an example (it was constructed on a Sh48.2 million budget). Sh731 billion would have constructed 15,165 other such schools; 322 well-built and resourced schools in every county in the country. #StateCaptureKE #KOT
In a country that is importing doctors, Sh731 billion could have funded the education of 1,268,993 medical students in one year. #StateCaptureKE @fnoluga @Dr_chitayi @DrAbdiissa011 @Muriuki_MD #Cuba
Such sustained funding over six years would mean the deployment of 27,000 doctors in every single county after the completion of their studies. #StateCaptureKE

Funding the infrastructure deficit has plunged us into unsustainable debt. As we struggle to meet our financial obligations in 2020, we should keep in mind that the unaccounted-for sum in 2019 would have funded our infrastructure deficit for 3.4 years #StateCaptureKE #KOT
While we tend to think of corruption in purely monetary terms, the truth is that it costs us the quality of our lives. It directly costs us our health. It costs us the quality of education we receive #StateCaptureKE @shuleyangu @TribelessYouth @Sautiyetu254
It costs us much needed human capital and incurs a hefty opportunity cost on true economic development. #StateCaptureKE @wef @TheEconomist
If we guesstimate the value of money lost to corruption each year as even just a half of that lost in 2019, what we realise is that each year we are sacrificing so much human potential at the altar of greed. #StateCaptureKE #FridayThoughts
Public spaces and the marshmallow test

In ‘Poisoned Wells: The Dirty Politics of African Oil’, Nicholas Shaxson makes a simple but interesting observation on the nature of corruption in Nigeria 🇳🇬.
#StateCaptureKE @NigeriaGov @NigeriaNewsdesk #Nigeria

He observed that Nigerian people were incapable of waiting. They haggled, pushed, and shoved one another in public spaces. Just a little patience in waiting in line is often characterised by passive or sometimes, active violence in Nigeria. #StateCaptureKE #FridayMotivation
Shaxson’s observation evokes memory of the well-known Stanford marshmallow experiment. This was a study done on delayed gratification in 1972 led by psychologist Walter Mischel, a professor at Stanford University.  #StateCaptureKE #KOT
It was followed up by researchers at the University of Rochester in 2013 that conducted the same experiment but with a twist. #StateCaptureKE @UofR @Stanford @AfricaResearch
In the first experiment, the researcher told a child that he or she was going to leave the room and that if the child did not eat a marshmallow placed in front of them while they were away, they would thereafter be rewarded with a second marshmallow. #StateCaptureKE #Children
However, if the child decided to eat the first one before the researcher came back, then they would not get a second marshmallow. The researcher then proceeded to leave the room for fifteen minutes. #StateCaptureKE #FridayMotivation
The results of the study came years later as researchers followed up on and tracked the children’s progress. #StateCaptureKE #FridayThoughts #FridayMotivation
They found that the children that had displayed delayed gratification were more successful than those that had eaten the marshmallows before the researcher came back. #StateCaptureKE @KResearcher @ISS_Research #KOT @StateHouseKenya @JubileePartyK @TheODMparty
Success, it was said, depended more on the ability of the subject to choose the pain of discipline over the ease of distraction. Hence began our crazed fascination with self-discipline and in-born character traits. #StateCaptureKE
In 2013, the results of the study were re-analysed at the University of Rochester. Before the children were offered the marshmallows, the researchers split them into two groups. #StateCaptureKE
One group was exposed to a series of unreliable experiences while the second was exposed to very reliable experiences. #StateCaptureKE #FridayThoughts
The group exposed to unreliable experiences would have the researchers give them something and then promise to bring them something else. The researchers would however renege on their promises. #StateCaptureKE #BrokePromises
The group exposed to very reliable experiences consistently received what they were promised. #StateCaptureKE
By the time the researchers were bringing in the marshmallows, the ‘unreliable experiences’ group were primed to distrust the researchers’ promises to bring in a second marshmallow and they quickly ate the first marshmallow #StateCaptureKE
The second group waited on average four times longer than the first group. They had been trained to see the value of delayed gratification. #StateCaptureKE
The ability to delay gratification that was so crucial to future success was not an in-born or predetermined trait. It was shaped by the environment and in particular, the subject’s previous experiences. #StateCaptureKE #FridayThoughts
Whether the child could trust the environment determined their ability to wait for the fulfilment of a promise. #StateCaptureKE #KOTLoyals2020 #KOT
Shaxson correctly concluded that the problem was not Nigerians. The issue was the system and the environment they found themselves in. #StateCaptureKE #Nigeria @NigeriaNewsdesk @NigeriaGov @PoliceNG @FMPRng #NOT
They were primed to distrust that the system could bring something to them if they waited and so they pushed and shoved and sometimes fought in public spaces. #StateCaptureKE @CBKKenya @KRACare
It was the same reason he found, that they pilfered the state coffers when given a chance to. Indeed, one could also say that they were primed to distrust, because the state coffers were notoriously pilfered. #StateCaptureKE
Social capital and State capture

Economists have a word for this Shaxsonian ‘trust’ people in society have among each other and towards their society as a whole: social capital.

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