Central government

Someone asked the following question: “In 1945 Germany was in ruins, defeated by the victorious USSR. 75 years later though, and Germans are now considerably better off than Russians and German provincial towns are considerably wealthier than their Russian counterparts. Why is this?”

Piotr Szafranski from Warsaw gave the brilliant answer below:

Many obvious factors are mentioned in other answers. I wanted to point out to a one still relevant today — local rule.

Germany, as pretty much any advanced country, is quite decentralized. There are matters for which the federal government is responsible, but the rest is left to the governments at the lower levels.

This “left to lower levels” of course has to be round-complete. You empower the low level governments with having own budgets, own tax base, own elections, own executives, own local policies.

For some reason that scheme, with a proper balance of central/local responsibilities, works to advance the country development. “Why it works” is a matter of economy, sociology, psychology. But it does.

USSR, on the other hand, was by design centralized. There were loopholes in that centralization, stories of lower-level Party functionaries who actually cared for their local domains of responsibility, but this was more of an exception than a rule.

A centralized structure of power creates wrong incentives for people in that structure. You do not depend on your local constituency, you depend on your higher-ups. So you work for the benefit of the center, not of the geographical area you live in at the moment.

In those systems, “The Center” becomes kind of a Paradise, a reward for living your earthly life in squalor. Every member of the power structure dreams of the moment of Ascension to The Center, where those willing virgins eagerly await and will reward him.

So, for all these people responsible for the the mundane issues all over the USSR, like hospitals or roads, those earthly matters were unimportant. What was important was to please The Center, and invest in The Center. With luck, you were investing this way in your future, in many ways. “Promotion to Moscow” was the goal of life, and the Saint General Secretary was holding those keys at The Gate of Heaven.

So, roads outside Moscow were of the “second grade freshness”, like that sturgeon in Bulgakov’s “Master and Margarita” novel.

Think about it. The fastest period of sub-national economic growth in Nigeria was between 1960 and 1966, when power was more evenly distributed. The sub-national units also grew fairly decently between 1979 and 1983, when despite centralisation, the mindsets of those who ran the sub-national units were expansive and independent of Lagos. Since 1999, we’ve largely looked to Abuja for everything, hence, as an example, the continued longing of Lagos to “align with the centre”. How has that worked out?

The future of Nigeria is either decentralised, or in pieces. There is no middle ground.

Have a good weekend.