November 09, 2017 / 9:40 AM /FDC
Mature democracies understand the role of party manifestos in their campaigns, and traditionally present policies in line with their ideologies. The last U.S election was arguably one of the most contentious and divisive elections in the country’s modern history. Both of the main candidates made similar pledges to make “America great again” but as they say, the devil is usually in the details.
A good distinction was their respective positions on tax reform. President Donald Trump pledged to cut taxes for all income brackets, while Hilary Clinton wanted to raise taxes for high income households.
The goal in both cases was to boost the economy by putting more money in the hands of the people. Both candidates had different “hows” to the same “what”. They tabled their arguments about the financial costs to government and benefits – short and long term – to the citizens. The end game is to improve welfare. Voters in the U.S as well as politicians are cognizant of this and the ability to better articulate the ‘how’ is usually where elections are won and lost.
Globally, some of the most crucial yardsticks for measuring political performance are jobs and inflation. The Misery index captures this. It measures economic well being by adding seasonally adjusted inflation to the rate of unemployment. History has shown that, a rising misery index typically reduces the likelihood of the incumbent being reelected.
The misery index has accurately predicted nine of the last thirteen elections in the U.S. Informed voters are simply much more sensitive to the economy and the “how” of making it better for even future generations.
The Nigerian voting culture is different but not for the right reasons. Such details of economic or foreign policy do not motivate the average Nigerian voter. A significant proportion of the electorate would rather vote along religious and ethnic lines.
Many politicians do not recognize the need to show up to publicly televised debates to properly articulate their policies. Perhaps because they know Nigerians are typically moved by grandiose promises; the more ambitious, the greater the appeal. A Nigerian political manifesto seldom includes details like '5% cut in the tax rate for those with annual incomes below N1 million for the next five years, to be funded by increased VAT on luxury goods from 2019'.
To stand a better chance of winning at the polls, the Nigerian politician would rather pander to jostling that come with the elections. Not enough attention is given to details of past or proposed policy. And even when the past is considered, it is done with a focus on grand infrastructure projects.
The Turning Point
A number of questions do arise. How did mature democracies become mature? Do democracies simply just become more mature with time or is there a catalyst to this transition?
The answers lie in the accountability nexus between democratic representation and taxation. The well-established connection is simple. No taxation without representation. The higher the taxation, the greater the reason for taxpaying citizens to demand good governance.
In the same way, the lower the level of taxation, the less likely citizens will demand representation. Taxation therefore, stands as the anchor for democracy and democratic accountability
Nigeria is a textbook case of limited state dependence on taxes leading to bad governance outcomes. At approximately 6% of GDP, Nigeria’s tax revenues are one of the lowest in the world. Decades of a reliance on petrodollars engendered a culture where governments had little incentive to be accountable, responsive, or efficient. Worse still oil rent meant less need for tax revenues and no need to secure large tax bases or enforce tax compliance over the years.
However, for Nigeria, the plunge in oil prices and the accompanying revenue shortfall may just have come with a silver lining – renewed aggression in tax collection and broadening the tax base. Perhaps the time has finally come for the Nigerian voter to hold the politicians to a higher standard.
A shift to Ideology
Aside from the obvious benefit of demanding that our politicians present more than impractical promises, comprehensive policies allow citizens to align their desires of advancing their economic welfare with the economic ideologies of political parties.
Taxation may not be a silver bullet, but perhaps the shift to a dependence on tax revenues will alter the political discourse and uplift the level of policy discussion that will transform the polity. The voting taxpayer must simply demand that it does.