So I’m not going to argue on the politics behind handing out amnesty in Nigeria. That’s not what this blog’s for. This blog was made to analyze economic decisions that Nigerians make and attempt to explain why these decisions are made. In this case, we’re going ‘macro’ and analyzing a decision made by the Nigerian Government. One important lesson from Economics is that every policy enacted has an effect, and often times, a bunch of unintended effects. One of such unintended effects is known as the Cobra Effect. Essentially, the Cobra Effect happens when a party engages in an action with noble intentions to solve a problem, but due to that action, the problem actually gets worse. Why is that? Economists call it ‘The Law of Unintended Consequences’. It happens because the incentives drawn up by the controlling party do not take into account all the possible decisions the reactive party can make. Like game theory, the second party chooses a strategy that provides them the best outcome in relation to the first move. Why’s it named after a snake? Vikas Mehrotra on Freakonomics explains the origin:

“So the “Cobra Effect” refers to a scheme in colonial India where the British governor, or whoever, the person in charge in Delhi, wanted to rid Delhi of cobras. Apparently in his opinion there were too many cobras in Delhi. So he had the bounty placed on cobras. And he expected this would solve the problem. But the population in Delhi, at least some of it, responded by farming cobras. And all of a sudden the administration was getting too many cobra skins. And they decided the scheme wasn’t as smart as initially it appeared and they rescinded the scheme. But by then the cobra farmers had this little population of cobras to deal with. And what do you do if there’s no market? You just release them. And so this significantly, by a few orders of magnitude, worsened the cobra menace in Delhi.”

So you see, what started off as a good idea turned out to be bad in the end. Mind you, for a while, the population of snakes would have declined, but eventually, it ended up getting worse than before. Now what’s Nigeria got to do with Cobras (well..except in juju Nollywood movies)? We haven’t got a cobra situation in Nigeria. What we have is much worse and far lethal than cobras. Our own cobras are terrorists: both the religious and financially motivated ones.

Now the policy in vogue these days is granting of amnesty. In order to fight terrorism, the Government hands out money to those who bomb and kill in lieu of the terrorists putting down their guns and embracing peace. Sounds like a fair deal, right? Sounds like something that could certainly reduce the amount of bombings in Nigeria? Well, on face value it does, but upon closer economic inspection, such a policy engenders a very detrimental effect.

So first things first, we can safely define amnesty as placing a price tag on violence. Consequently, amnesty tells people that engaging in crime with the ‘obvious’ aim of causing enough headaches to the Government, not getting killed, and planning to retire from it can be pretty lucrative. It’s essentially like a retirement package, except the cash starts coming in way before one is 60.

So, what stops anyone from bringing the whole family into the ‘Boko Business’? Even a neutral party would be hard-pressed to stay neutral in this case. Imagine your neighbor’s son now drives a new Honda car, courtesy of amnesty, while your son’s straining your pockets by going to school. Only few would resist the temptation to take the ‘Boko-path’ to amnesty.

Another micro-incentive is the demarcation of financial renumeration from amnesty based on the rank of terrorists. The foot soldiers get 100,000 Naira and I’m assuming the leaders get a lot more money. Do you see where this is going? As I said, we respond to incentives as humans. Now who wouldn’t want to be on the top rank? In crime-lucrative organizations, one has to be ‘bigger and badder’ than the rest of the acolytes to get to the top rank. So I suppose that doing something extreme helps one climb the rank faster, which leads to more violence, as Boko lads would kill to get to the top…literally . Also, now imagine different violent groups begin to compete for turfs in the same area. Next thing, we’ve got intra-group violence occurring.

Do we all get the point? At first these sorts of incentives seem to work, but eventually, someone always finds a way to beat the system. As Steven Levitt of Freakonomics says ‘I think you start by admitting to yourself that no individual, no government, is ever going to be as smart as the people who are scheming against you. So when you introduce an incentive scheme, you have to just admit to yourself that no matter how clever you think you are, there’s a pretty good chance that someone far more clever than yourself will figure out a way to beat the incentive scheme.’

It’s never fun being the prophet of doom, but if the Government keeps relying solely on amnesty as a means of peacefully solving the issue of violence, more places in Nigeria could start lighting up like a Christmas tree…and it’s not going to be cause NEPA has gotten better.

Please reread, comment, and share this article! You’ve got an incentive to educate your friends! 😉