Ethnic discrimination constantly poses a serious hindrance to the social and economic growth of Nigeria. In many instances, ethnicity plays an undeservedly significant role in many economic decisions we make. Most times, such decisions drive a wedge between the efficiency/productivity of the nation and the supply of productive individuals…especially in Government. In Nigeria, the ethnicity of the Minister or Permanent Secretary typically determines the ethnic majority of employees within a ministry. Unfortunately, most Government employees have no real incentive towards ensuring that Government functions, rather, most engage in rent-seeking and patrimonialism. The incentives of such a system exacerbate the issue of ethnic discrimination.
Good institutions aid in curbing inefficiencies in Government that might arise due to such ethnic discrimination. After researching on the effect of ethnic diversity, William Easterly (1999) finds that ethnic diversity has a more adverse effect on economic policy and growth when a government’s institutions are poor. But poor institutions have an even more adverse effect on growth and policy when ethnic diversity is high. Conversely, in countries with sufficiently good institutions, ethnic diversity does not lower growth or worsen economic policies. He concludes that ethnically diverse nations that wish to endure in peace and prosperity must build good institutions.
Are good institutions enough to curb ethnic bigotry in a nation where Government remains one of the biggest employers of labour? Probably not…alongside good institutions, Government has to shrink. A smaller Government is likely to reduce the ills of ethnic heterogeneity in a highly discriminatory nation like Nigeria. Large governments are simply ineffective in nature, overtly bureaucratic and expensive to run. El Rufai (2013) emphasizes that on a macroeconomic level, the government has to both shrink and become more efficient. In instances that the Government shrinks, the private sector presumably picks up the slack. This way, we can increase national productivity as well as reduce ethnic discrimination.
Why would private institutions be better at resisting ethnic discrimination? An effective workforce is essential to any private institution. Consequently, private institutions cannot afford to engage in the same sort of ethnic discrimination. In competitive markets, companies cannot afford to make decisions solely based on ethnicity. Such inefficiency could mean the end of ethnically driven companies. Conversely, ethnic diversity could be beneficial to private institutions. Forbes’ surveyed 321 executives at large global enterprises that overwhelmingly agreed that a diverse and inclusive workforce brings the different perspectives that a company needs to power its innovation strategy.
So why don’t Nigerian private institutions push for greater ethnic diversity in their hiring process? It might be ignorance, or worse, nonchalance. It’s important to remember that humans can be quite irrational, even when we’re quite aware of the consequences. We make irrational decisions like engaging in unprotected sex even when cognizant of the risk of contacting STIs. Likewise, people still choose to hire based on ethnicity in spite of being aware that such hires might be liabilities to the company. It might explain why a large number of private institutions in Nigeria still suffer from mediocrity.
In the end, there’s only so much that institutions, systems or incentives can do to mitigate ethnic bigotry. Why? They eventually depend on human decisions. Thus, it’s eventually up to individuals to decide if the pleasure of speaking their local language in the office outweighs the pleasure of making a profit. Hopefully, people will have the common sense to choose the latter.
Chuba Ezekwesili is a Graduate of Economics & Political Science from Claremont Mckenna College. He currently works for the Civil Society Legislative Center (CISLAC) as an NYSC Corper. He enjoys reading up on matters pertaining to economics and is also an avid technology geek with a believe that the intersection of both can create immense economic development. He can be found at @ceezeks on Twitter.
Source: Citizens Platform
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