News Column

The Law of Unintended Outcome At Work

May 26, 2014

Oscar Semweya-Musoke



Earlier this month, Kigo Thinkers, a new think tank advocating alternative and deeper analytical thought regarding public policy as a requirement for good citizenship, launched a paper.

The media today is awash with reports of seemingly-poorly conceived policies, including the HIV Bill, the Anti-Pornography Bill [Act], Umeme concession contract, and more.

The paper, Bank Loan Interest Rates: Questions of Governance, Social Responsibility and Good Practice, concludes a process that started off with a policy dialogue organised by Kigo Thinkers to consider the unintended consequences of Bank of Uganda's use of interest rates in 2011 to 2012, to control inflation.

Whereas inflation has been tamed, some businesses collapsed and people who failed to meet loan obligations lost property. At the time, both Red Pepper and The Observer reported extensively about the crisis, by especially listing the failing businesses or those that lost property. Indeed, Red Pepper's seemed like a 'shame list'!

Ironically, a tool that was employed by BOU to save the economy, unfortunately caused loss of property, collapse of businesses and distress to citizens, which were named and shamed in the press! A trader at the launch narrated how she had to sell off personal property to avoid the dreaded bailiffs.

In the United States of America, the government lent, spent or guaranteed trillions of dollars to rescue its economy. This was done through a relief programme that bailed out banks during the financial crisis leading to 2010.

Strangely, the unintended result yonder is that bankers earned huge cash bonuses while many of their clients lost property and are out of employment. The US government could not have envisaged such a scenario in which an intervention enriches banks but leads to further impoverishment of its citizens.

Bank of Uganda is one of Uganda's strongest institutions. However, the Kigo Thinkers' paper asserts that the central bank should be more than a regulator and become an active player in the economy, by taking responsibility for fiscal policy as well. This would enable BOU to generate more 'social-caring policies', even though Uganda has a liberal economy.

Many countries that are by far more capitalist than Uganda have managed to target interest rates to social issues such as unemployment. Unintended consequences crop up in all sorts of places. My sub-editor at The Observer has edited my last two articles in a way with which I disagree.

Last week, the introduction was changed from: If you, or anyone you know, live to the west or south of Kampala City and use commuter taxis in and out of the city for work, it is possible that your exercise needs have been sorted out ... to: If you, or anyone you know, live to the west or south of Kampala city and use commuter taxis, it is possible that your route was sorted out by Kampala Capital City Authority (KCCA).

I also wrote: "When the director of physical planning eventually walks the route returning home, hopefully after 7pm, he will feel the very negative waves that have engulfed the Clock Tower area. It is not for the faint hearted!"

My comments were edited to: "I wish the KCCA director of physical planning would eventually walk this route, hopefully after 7pm. He will realise that it is not for the faint-hearted."

As a result, many users of Usafi park have called or sent me texts complaining that I seemed to support KCCA's relocation of commuter taxis to the park. A few were unhappy because I had taken time to interview them but my comments seemed misinformed.

In that article, I wished to point out that KCCA's intention to decongest the city had unfortunately caused city users misery because they now have to walk longer distances through areas perceived as unsavory. The edits portray my comments as sympathetic with the KCCA director for physical planning and that is far from the truth.

It is quite likely that this director, who probably has a four-wheel car plus driver, made a decision that has negatively affected poor people from his luxurious air-conditioned office.

The trouble with editing a column is that in an attempt to improve the message, the unintended result may very well be a different opinion from the one intended by the columnist.

As one of the Kigo Thinkers, I fully subscribe to former Archbishop of Canterbury Rowan Williams' belief that the "... greatest gift is in cultivating a critical citizenry who cannot be treated as fools" and that what "... matters most - (is) helping to shape a culture in which it is harder to treat the public as fools, harder to exploit prejudice or fear, and easier to conduct constructive argument in public!"

The author is one of the founding Kigo thinkers.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: AllAfrica


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters