In economics, the concept of “Perverse Incentive” commonly refers to a situation where an incentive leads to detrimental outcomes for the enablers of such incentive. The most popular example comes from British Colonial India where an attempt to eliminate cobras in Delhi by paying for each killed cobra led to people farming cobras. Due to self-interest, the socially or morally optimal outcome will never occur as humans would rig the system to perpetuate the incentive. This is the rabbit hole that Nigeria needs to escape from.
Barely a month ago, several states in Nigeria’s north were cut off from electricity supply due to the destruction of some transmission towers. While most Nigerians focused on the lamentations from the North, few persons noticed a report that within a three-year period, about ₦29.6 billion (~US$35 million) was spent on repairing 266 transmission towers. Whereas the latest culprit is “terrorism”, for a long time, the destruction of these towers was either the forte of thieves seeking to sell “scrap metal”, or as some allege, intentionally executed to create a need for repairs. Whichever option is a classic case of a perverse incentive.
Nigeria is no stranger to perverse incentives. Wicked politicians keep citizens poor to catalyse the effectiveness of vote buying. Wicked feudalistic elites keep their people uneducated to maintain unquestionable control. Repentant terrorists are feted and rewarded in a way only rivalled by the Prodigal Son. Militants are paid monthly to remain non-militants. States are rewarded in perpetuity for lack of economic development, and quotas are assigned to reward educational underachievement. Insecurity is rewarded by even greater untraced security votes. The list goes on like a recursive litany.
Coming back to the issue of our dear transmission towers, the vandalization of towers to harvest metal parts coexists with the destruction of rail tracks, guard rails of bridges, and the theft of “armoured cables” from transformers. The situation is so bad that in the midst of anti-government protests in August, there were videos of some criminals destroying concrete slabs used to make drainages just to retrieve the steel reinforcement for sale. Now, let’s not bother ourselves with whether the thieves were operating from a context of poverty as this would just muddle up everything. Rather, I think if we seek to stop the vandalism, addressing the “demand side” is the 80% from Pareto’s Rule.
Iron smelting facilities in Nigeria are not so much that Government Security Forces are unaware of the locations and their operators. If the world can institute systems to trace the source of diamonds, cocoa, trees, etc., then Nigeria can monitor entities that melt iron-containing items to ensure that their suppliers’ business model does not include destroying existing infrastructure. The legal framework may need to be tweaked to remove the burden of proof of theft from the government. The operators should be able to demonstrate lawful sourcing of inputs. Once stories start spreading of convicted operators facing lengthy jail terms and losing their facilities, most operators would change to lawful sourcing, leaving only the committed criminals to be dealt with by the government.
On the supply (“destruction”) side, difficult terrains and long distances would constrain security forces. However, we can have Quick Response Teams designated for say a 50km radius that can be structured for immediate deployment to any location where an attempt to vandalise transmission towers is noticed. My understanding is that we already have fibre optic cables (FOC) running along the transmission route. With suitable intrusion detection systems connected to decode signals, the FOC’s can be used to detect unusual activity around any tower. But for this to work, there has to be tight coordination between the control rooms and the Quick Response Teams, just like emergency call centres are able to mobilise police, fire fighters, and ambulances to target locations in developed countries. With drones becoming cheaper, the teams can have eyes in the skies to avoid walking into an ambush.
Beyond the softer aspects of the idea articulated above, Quick Response Teams would need to have licence to shoot at sight. Now, I understand that some persons would squirm at the thought of shooting a vandal without attempting to capture the person and go through the legal processes of demonstrating that the person was actually vandalising a transmission tower, and not merely taking pictures under 33,000, 132,000, or 330,000 volts. But the idea is to set a deterrent. If you know that going to unbolt a transmission tower could earn you a bullet to your wicked brains, you may reconsider, except you are a committed vandal or terrorist. We can also look at the lives lost when electricity supply is cut off as a moral balancer for any concerns about eliminating those who seek to destroy the lives of others.
The perverse incentive challenge is multi-faceted. We have just looked at a small aspect, but the underlying issues apply universally. The crux is that like Newton’s First Law of Motion, people would ordinarily not stop something that rewards them. The reward needs to be removed. Also, like economists would say, all things being equal, this article assumes that the government actually wants to stop the destruction of public infrastructure. This is the most important requirement for avoiding the cobra effect.
Image Credit: milezero.io
Jilomes 