Second, the key players in the system have remained in important positions for very long periods of time. To this day candidates for top political positions are old-timers, such as Muhammadu Buhari, author of the 1983 military coup, running for President in 2011<sup>9</sup> . George Obiozor of the Nigerian Institute of International Affairs once called Nigerian politics “a game of rocking chairs, a game in which unlike in the game of musical chairs, there is no movement”.<sup>10</sup> This is at odds with a country often depicted as rocked by coups and erratic political change. Yet, it may be that elites at the top rotate, while the underlying power structure remains little changed.

Third, large, complex projects were distributed across the major parts of the country, for example, one refinery in the East at Port Harcourt, one in the West at Warri and finally one in the North at Kaduna, some 800 km from the nearest port. Roughly this corresponds to the territories of the three main ethnic groups of the country, the Yoruba, Hausa and Igbo. Early on in 1962 the approach was to provide different regions of the country with equity shares in refineries in economically efficient locations. However, this proved not to be a stable solution politically. The results were bizarre projects. The Kaduna refinery was designed to produce specialty products that others did not produce, including asphalt for road construction. The refinery was built. Then the country had to import heavy oil to obtain the desired product slate via roughly 800 km of oil pipelines. When asphalt was finally produced the government ran out of money following the decline in oil prices in the mid-1980s. The response was to try exporting asphalt by rail back to the port ostensibly to obtain valuable foreign exchange. It was like buying a house knocking it down and selling the parts.

Fourth, as the system is focused on extracting rents from funding of complex construction projects and undermines management capabilities and incentives, it may easily lead to provision of poor quality services. Whereas proper accounting allows one comprehensively to “follow the money”, the causes of substandard quality are harder to pin down. For example, officials in Nigeria almost reflexively blame suppliers for sub-standard quality of equipment or construction regardless of the real reason. They might be right, they might not be. One cannot easily find out. Funds for maintenance are lacking. Operations by local staff in government firms have often been deficient. The country is full of private fallback solutions for deficient infrastructure services like standby generation or private water vendors.

Finally, the various arrangements that make corruption manageable provide a rational explanation for often observed uneconomic decision-making, weak “capacity” and the like. Reviews of Nigerian policies by the country itself have routinely come out with views that “priorities are not properly defined, planning seems to be synonymous with aggregation of projects, and coordination by government departments is poor”. This particular assessment was made for NNPC by a managing director. Hence, top managers understand the issues. At the same time Nigerian staff performs effectively in different settings, for example, in the private oil

> 9 For a series of examples see Klein (1987)

> 10 Newswatch October 6, 1983 p.25

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