and capitalism at the global scale, or even the systems of feudalism and republicanism in different parts of nigeria and the outcomes for poverty and wealth creation, one can hypothesize that institutional arrangements make all the difference. institutions drive human progress, and while some unleash, others inhibit human progress. as a layman, it is evident from all over the world that wherever the rule of law prevails and property rights and contract enforcements are more effective, progress has been faster than otherwise. in nigeria, examples abound as to how alternative legal - institutional infrastructure emasculated development. the constant changes or suspension of aspects of the constitution during military rule created uncertainties. there was also unpredictability in the laws governing the society as specific laws could be enacted overnight and with retroactive effects. such uncertainties were inimical to investment and property rights, and hence retarded growth. one is not sure whether the indigenization decrees did not retard the process of industrialization and private enterprise in nigeria. it is possible that the action could have created uncertainties regarding foreign ownership of production in nigeria and hence retarded fdi which we are later to seek after. a legal system that conferred powers of monopolies to the state over telecommunications, power, and some infrastructure obviously retarded private investment in these areas. an institutional framework ( a legal system a la the constitution ) which has proliferated states and assured them of unconditional access to ‘ statutory allocation of revenues from the centre ’ destroys the known basis of human progress - competition. a constitutional provision that allocates such resources to states with powers to spend without any strong oversight institution has created a rentier system and perpetuated a culture of ‘ cake sharing ’ without any attention to ‘ cake baking ’ especially at some of the lower tiers of government. it has also destroyed the fundamental umbilical cord between the state and business. the relationship between state and business is a strategic and mutually beneficial one : states depend on businesses to create jobs and to pay taxes to the state ; in turn states provide the enabling environment to help businesses thrive. the dependence on ‘ statutory allocation ’ has destroyed that relationship in most cases to the extent that many states hardly pay attention to enterprise development. if they can get all the money they need from ‘ allocation ’, why care about businesses whose taxes amount to pittance? today, not many states care about creating an environment conduci

society to another ( revolutionary or radical change ), or is there path dependence ( where initial conditions in society ’ s evolution play a dominant role ), and hence the process of institution creation is adaptive and evolutionary. this is a question for our eminent legal luminaries and institutional economists to address, and the jury is still out on these questions. often, one hears nigerians swing to either of the pendulums depending on the convenience. in one case, people will argue that it took the first world economies hundreds of years to evolve the institutions and legal infrastructure that have propelled them to their present state. the conclusion from this line of thinking is that nigeria is trying to run too fast and we should adopt laws and institutions that ‘ suit our culture or environment ’ - whatever that means. for these people, culture and environment are constant, and one needs only to search for appropriate laws and institutions to fit. on the other hand, people try to compare nigeria with america, japan, malaysia, etc and wonder why our leaders cannot give us a society like those. put differently, it is akin to the debate about the nature of leadership and society : some argue that a society gets the leadership it deserves ( leadership as endogenous ) while others argue that leadership emerges to propel a society to a path it could otherwise not evolve on its own ( exogenous ). in other words, does nigeria have the kind of institutions it deserves given its culture and level of development or should we actively and creatively design new institutions that would propel us to achieve the vision of being one of the largest economies in the next two decades? what should those institutions be? my view is that it is not an issue of either of the two polar positions of either evolution or revolution. we need both. nigeria cannot and should not wait for another hundreds of years to ‘ evolve ’ the right kinds of institutions. we need rapid institutional adaptation : in most cases, we don ’ t need to re - invent the wheel as it were. ingenious adaptation and innovation in ways that reflect both our local conditions and our shared vision of the future are what we need. in others, we need to create the systems from our collective experience. we must not be afraid of trying or experimenting with new ideas or institutions : only those who dare can accomplish! recall the institutional re - engineering we undertook in respect of the banking industry and the outcomes for the economy today. as a template to ensure effective institutions, the world bank (