Download globalization and traditional institutions in nigeria: a tale of two villages

GLOBALIZATION AND TRADITIONAL INSTITUTIONS IN
NIGERIA: A TALE OF TWO VILLAGES
Raluca Iorgulescu Polimeni, Assistant Professor*
Department of Economics, Siena College, New York, USA
John M. Polimeni, Assistant Professor
Department of Humanities and Social Sciences, Albany College of Pharmacy,
New York, USA
Diana Pociovălişteanu
Faculty of Economic Sciences, “Constantin Brancusi” University, Targu-Jiu,
Romania
Abstract: Two Nigerian villages were surveyed to study the impact of globalization
on the traditional Igbo society. Structural adjustment has impacted the two villages through
economic reforms and programs such as reductions in government expenditures on social
programs and the diminishing role of the public sector. As a result, the social capital and
social cohesion, and the capacity for local economic development were diminished, and some
village institutions were weakened. On the other hand, the institution of the extended family
has allowed the two communities to form a symbiotic relationship that has helped maintain
cultural traditions. The paper argues that the globalization policies of the international
institutions based on the “weak” version of sustainability are over-simplified. By considering
the importance of complex institutions in the development process, a more realistic picture
emerges of the positive and negative effects of globalization.
1. Introduction
Scholars working in the economic development field acknowledge more and more
the essential role played by institutions. Some new institutional economists treat
institutions as “constraints that human beings impose on themselves” [1]. A more realistic
view is that institutions are repositories of incentives, rules, routines, and conventions that
constrain and also enhance the ability of agents to act in specific ways. Although
institutions do foster and underlie particular behaviors and habits, they can also be
influenced and shaped by human action [2].
The example of economic change in rural Igboland, Nigeria, shows how the
traditional development polices promoted by international institutions have failed to
improve the lives of the world’s poorest and in response to these policies the traditional
institutions adapted to provide relief. In this regard, the relationship between
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globalizationunderstood as increasing interconectedness of the world economies
associated with population and information flowsand institutions is critical to the
development process. Globalization has not only weakened traditional institutions but has
also fostered institutions that make it difficult for the poor to reap the advantages of the
global market economy.
In the pages that follow we examine the impact of globalization and institutional
change in two Igbo villages in southeast Nigeria. The globalization process resulted in the
implementation of structural adjustment policies in Nigeria. These neoliberal, marketbased policies rationalized the withdrawal of state support for social programs such as
spending on health, education and basic infrastructure. Based on survey data from the
traditional rural village of Umuluwe and the recently established satellite village (Obigbo)
we discuss the impact of the changing economy. Globalization reinforced migration from
Umuluwe to Obigbo, as larger numbers of Umuluwe residents left the impoverished
village for better living conditions in Obigbo. Understanding the interdependence between
them is central to understanding the impact of globalization and markets on Igboland.
2. Globalization, Poverty and Development
Gowdy et al. suggest that “globalization means increased flow of capital around the
world; removal of barriers to trade; increased diffusion of technology, and the
internationalization of the production process. Globalization has also been perceived as a
means to institutionalizing the market as the overarching mechanism for resource allocation.
The question is on what extent globalization has impacted poverty and living conditions in
rural communities of Africa” [3]. Some analysts argue that the poor have been made worse
off by globalization, or that the benefits have accrued disproportionately to the more affluent
members of society [4].
In shaping the new global economy, the World Bank’s and International Monetary
Fund’s globalization policies have forced developing countries to implement market-based
economic reforms–deregulating their economies, liberalizing trade policies, and reducing
budget deficits–as a precondition for receiving debt rescheduling from creditor nations. The
Structural Adjustment Programs have strengthened conservative demand management
policies, including reduced government expenditures on social programs such as health,
education, infrastructure, as well as freezing wages and public sector employment. While
these reforms have improved the macroeconomic performance of some developing countries
they have negatively impacted many rural communities [5].
More than fifty years after gaining their independence, and amid stories of
desperation and grim poverty, it seems obvious that the “underdeveloped” countries would
not be able to follow the “progressive” (Western) path toward prosperity. Nigeria currently
ranks 158 out of 177 countries in the Human Development Index (HDI) of the United
Nations Development Program [6]. Nigeria, like many other African countries, has
experienced economic crises during the past twenty five years. The rural areas, in
particular, suffer from the negative impact of national economic downturns. Globalization
offers opportunities for developing countries, and Nigeria in particular would seem to have
a large role to play in the growth of the global economy. The country is blessed with large
reserves of petroleum; in 2003 the Nigerian share of global reserves was 3%, while the
share of global production was 2.9%. The Nigerian economy is heavily dependent on the
oil sector, which accounts for nearly 80% of government revenues, 90-95% of export
revenues, and over 90% of foreign exchange earnings [7]. Unfortunately, Nigeria has very
few refineries so gasoline is not easily available; to make the future grimmer, Nigerian oil
is projected to peak at the end of this decade [8]. On the bleak side, fluctuating primary
resource prices had a disastrous effect, causing real commodity prices in the 1990s to be
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45% lower than they were in the 1980s. Also, the lack of supporting institutions and
infrastructure prevent Nigeria’s poor from taking advantage of its abundant natural
resources and human capital [9].
During the post-colonial period, most governments adopted a neoliberal approach
to development, focused on rapid industrialization and increased GDP. This path to
economic growth shifted attention away from agriculture and rural development, resulting
in rapid urbanization and the emergence of a Western sub-culture which eroded some of
the cooperative values and institutions of rural communities in southeastern Nigeria.
Subsidies to foreign manufacturers were financed in the 1970s and early 1980s by the
proceeds from the oil boom. But with the end of the boom in the 1980s, the government
was forced to support its industrial policy with foreign loans, plunging Nigeria into huge
debt accompanied by a crushing debt-service burden [10]. The oil wealth was not used to
promote a balanced development, rural areas and local enterprises were neglected while the
main beneficiaries were the foreign investors and local elites. These policies affect
traditional institutions and the family structure while promoting new institutions
facilitating the transfer of people and income between rural communities and rapidly
growing sub-urban villages.
3. The Villages of Umuluwe and Obigbo, Nigeria
The village of Umuluwe is situated within the predominantly Christian southeast
region of Nigeria, and is about 20 miles west of the regional capital of Owerri. Typical for
the patrilineal Igbo society, Umuluwe is a nucleated village of about 2000 people.
Umuluwe is representative of rural Nigerian villages with difficult access from outside
areas. The dirt roads are difficult for the very few cars owned by villagers or their visitors
and there is no bus line; as a result, people cannot commute for work outside the village.
Electricity was introduced in the past decade and was fully paid by the village levies, but
the power is on intermittently. There is no running water; the water has to be carried from
the only spring about one mile away from the center of the village. The soil has a low
fertility and the absence of livestock makes agriculture unsustainable in a poor community
unable to afford chemical fertilizers. The village’s main sources of income are cash crops
(palm trees and fruits), water, and paving stone. Farming is mainly for subsistence;
additional produce is sold at the weekly markets in neighboring villages. The additional
earnings are used to buy meat, milk, sugar, and bread; villagers also use the extra income
to pay community dues, and the fees for their children schooling and for health care.
The Umuluwe community has social and political institutions specific to West
Africa [11][12]. The extended polygamous family is the basic cell for the village network.
Historically, the Igbo people have a complex and sophisticated form of political life
with family governmental power much more diffused than in many places of
Africa. At the extended family level (“micro” level), the main role is played by the
elders. At the community level (“macro” level), the Igbo people are led by the
village associations—gender separated, men’s and women’s associations—and by the
elders of the village’s extended families, but without any formal, centralized
political authority. The associations have power over funeral ceremonies, village level
development projects, and the sanction of the misbehaving. Their role is more
important than that of the elders [13].
In 1958, villagers from Umuluwe together with other migrants searching to earn
cash income founded Obigbo in the oil rich coastal areas of southeast Nigeria. The
relationship between Umuluwe and Obigbo is much more than a simple case of rural-urban
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migration; the two villages are symbiotically related in terms of economic activity, village
associations, life stages of the villagers, and gender roles. In Obigbo, about 20 miles from
Port Harcourt, life is more comfortable than in Umuluwe in terms of running water,
electricity, telephone lines, and tarred roads, even though these facilities may not function
all the time.
According to local estimates, nearly half of Umuluwe villagers have migrated to
Obigbo. Thus, the two villages can be used to discuss the effects of globalization and
urbanization. Umuluwe represents the traditional ancestors’ village while Obigbo
represents the modern village associated to salaried jobs and the global economy. The two
villages, Umuluwe and Obigbo, are interdependent. Umuluwe is an important source of the
labor for Obigbo and the temporary migrants bring with them from their homeland some of
the basic supplies—like palm oil and palm wine—which are not produced in Obigbo.
Money flows back from them to the extended family left behind. For the Igbo people the
spiritual life (i.e. traditional medicine, traditional legal system, and religious system) is
very important and the homeland is the source of it. Migrants who become sick outside
Umuluwe return home to receive traditional medicine and spiritual healing. Umuluwe
represents the land of birth and the land of return at old age, the final home. When
someone dies in Obigbo, the person is often buried in Umuluwe because the homeland is
the final resting place for the Igbo [14].
4. Globalization and Institutions in Igboland
In May 2001, one of the authors together with Dr. Steve Onyeiwu and Dr. John
Gowdy, with the help of local assistants, conducted a socio-economic survey in the
villages of Umuluwe and Obigbo; the data collected provided an abundance of information
about the effects of globalization and economic change on traditional institutions, new
institutional arrangements created in response to rapid economic change, and institutions
hindering development. During the visit to Umuluwe, two behavioral games (ultimatum
and dictator games) were played to investigate the altruistic or selfish behavior in
economic decision-making. The process of globalization and the structural adjustment
policies implemented at the request of international financial institutions had negative
effects on the communities studied. In the village of Umuluwe, the weakened local
institutions are a result of reduced social capital and social cohesion, and, by diminishing
the capabilities of the village, of a decreased capacity for local economic development.
4.1. Village Social Capital in Umuluwe
Social capital can be understood as the social-structural resources embodied in
institutions, civic communities, families, and the larger society [15]. Modernization and the
associated economic reforms have affected the social capital of Umuluwe by increasing
poverty and income inequality. As a result of economic liberalization, the ever increasing
cost of living and the removal of subsidies on basic necessities such as health, education
and fuel, exacerbated the incidence of poverty. Many villagers were forced to migrate
looking for a chance for a better income and as a consequence the village was depopulated
and the community life weakened. Since the social capital of the village depends on the
close interactions between friends and family within the village, when people migrate
farther from their village this network breaks down and the social capital is weakened.
4.2. Structural Adjustment and the Capacity for Local Development in Umuluwe
The globalisation process, through its underlying philosophical foundation of
‘smaller governments,’ ‘getting the prices right,’ ‘responsibility and accountability,’ has
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encouraged state neglect of impoverished and powerless villages at a time when state
support is critical. Structural adjustment has undermined the production capacity of the
villagers in Umuluwe because of the withdrawal of state support for social programs such
as financing of the village primary school, the provision of electricity and water supply.
The Nigerian government raises taxes⎯local, state, and federal⎯but it does not fund public
projects; out of 236 villagers interviewed none acknowledged receiving any public services
in return for the taxes paid during the past decade. The tax revenues are spent for projects
that benefit only urban residents and the ruling class. As a result, the purpose of village
associations is the execution of village development projects (i.e. electricity, primary
school, and healthcare services), under normal circumstances, provided by the state. These
programs are financed by imposing high levies on villagers regardless of one’s ability to
pay. The survey results show that for the village as a whole total levies actually exceed
total income (for almost all of the Umuluwe villagers, these levies exceed income), people
have to borrow money to pay the levies and the vicious circle of poverty is perpetuated
resulting in an increasing level of poverty (especially that of women who, customarily,
have to provide the food for their husband and children). Overall, the income diverted for
common projects reduces the investment capacity of the villagers in local production and
instead of the intended economic growth the result is a deteriorating local economy.
4.3. The Weakening of Some Village Institutions in Umuluwe
The weakening of village institutions is the effect of structural adjustment that
induced the migration of so many of the Umuluwe villagers to sub-urban areas (such as
Obigbo) and cities. Modern market forces in Igbo society have led to the breakdown of
traditional gender roles and decreased the power of women associations. For example,
traditionally women held significant economic power over the palm oil and cassava trades;
commercialization of these crops and the cultural traditions which did not allow women to
travel without a male relative made it difficult for women to compete with men in longdistance trade and transferred this economic power to men.
The reduced number of people residing continuously in the village undermines
village institutions and makes the enforcement of village norms and values ineffective.
Traditionally, the Igbo society is based on an ethical system that promotes hard work,
honesty, trust, and cooperation. People who serve their communities and maintain the moral
and ethical ideals of the community are rewarded by the community by awarding them the
title of “chief” which does not lead to material gains but rather to respect and reverence [16].
Chiefs represent role models for the youth, and they are considered persons of exemplary
character. As a result of globalization and modernization of the Igbo society, the institution of
‘chieftancy’ lost its original moral and ethical meaning. Due to the deteriorating economic
conditions in local communities, as a result of structural adjustment policies, the trend is to
award the title of chief to those who donate money to the community regardless of the source
of the money. As a result, well-known criminals now receive chieftaincy titles from their
villages – a practice that has compromised the high moral and ethical values of the Igbo. This
has increased the conflict in the Igbo community, particularly with regard to land disputes
which were traditionally solved by the elders and chiefs. Most of these disputes are now
resolved by the courts, rather than by the elders and the chiefs of the community which are
not trusted to be neutral [17].
4.4. Sharing and Cooperation in Umuluwe
Experiencing the grim poverty of rural Umuluwe and the institutional weakening as
a result of globalization, the question arises if people change and become more selfish.
Ultimatum, dictator, and other behavioral games are used to address this question and the
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results from different cultures have exposed important deviations from the standard
economic model of human behavior as selfish and profit maximizing Homo economicus. In
the ultimatum game a proposer is offered a sum of money and is instructed to share it with
a respondent. The respondent can either accept or reject the offer. If the offer is accepted,
each participant receives the aggreed upon amount. If the offer is rejected neither
participant receives any money. Thus the ultimatum game captures both the motives of
altruism and retaliation. In the dictator game the proposer may share as much or as little as
she/he desires without fear of retaliation; the respondent cannot reject the offer. The results
for Umuluwe confirm the findings from studies done across the world that individual level
economic and demographic variables are not good predictors of behavior either within or
across cultures; differences among cultures are large and are correlated with group norms
and values, not individual attributes. In the case of Igbos, an ethic of fairness and social
solidarity still prevails today that cuts across individual attributes. The persistence of
altruism in Umuluwe may be explained by a number of factors, including weak market
institutions, local institutions promoting fairness and cooperation, a high level of illiteracy
which necessitates reliance on oral communication and a great deal of face-to-face social
interaction, and the strong religious philosophy of the community based on Roman
Catholicism, reinforcing traditional beliefs of rewards and punishment after death [18].
4.5. Symbiotic Villages: Umuluwe and Obigbo
In spite of the negative aspects of some weakened local institutions and decreased
capacity for local economic development, the institution of extended family has allowed
the communities of Umuluwe (ancestors’ village) and Obigbo (migrants’ village) to form a
symbiotic relationship that has helped maintain cultural traditions. In Igbo society,
polygamy is considered a sign of high social status as only a wealthy man can afford more
wives. One could argue that the establishment of symbiotic villages may be a rational
response to modernization; the large extended family compound where members come and
go and adjust family duties accordingly is more adaptable than the western style nuclear
family. The migration of Umuluwe villagers to Obigbo did not destroy the major local
governance mechanism which is the power of associations. The major associations in Obigbo
or Lagos are branches of the Umuluwe associations and they send representatives to annual
meetings in Umuluwe of the respective association. The proof that the power of Umuluwebased associations was not eroded is the fact that Obigbo villagers still obey and pledge
allegiance to decisions from the Umuluwe headquarters of the associations [19].
5. Conclusion
The discussion of the two Igbo villages shows that the effects of globalization are
complex and may impact traditional societies negatively. The implementation of marketbased economic reforms and programs unaware of the cultural-institutional background is
one aspect of the globalization process that has impacted severely on the two villages.
Structural adjustment has meant reductions in government expenditures on social programs
such as education, health, and infrastructure, and the decreased role of the public sector.
The effects of the cash economy can be seen in Umuluwe and Obigbo in increasing debt
and rising prices for necessities. More subtle are the negative effects on traditional values
and social cohesion in village life.
Migration occurs because of economic considerations, typically with migrants
moving to an urban region in search of employment. In the case of the two interdependent
villages discussed when the spiritual aspects of the day-to-day life are ignored and the only
connection considered is the flow of remittances from Obigbo back to the extended family in
Umuluwe, the relationship between the two villages is mainly parasitic. Only when the
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society is considered as a symbiotic whole—material and spiritual—the ‘mechanism’ behind
the economic life in rural Umuluwe and sub-urban Obigbo can be understood and successful
policies can be designed [20].
It is hard to say at this point whether the net effects of modernization and the
response to it by Umuluwe and Obigbo will be positive or negative. We do know,
however, that future effects of globalization on rural Africa will depend on the particular
cultural characteristics of the people affected. Economic policies designed to ease the
transition to a modern economy cannot be effective without understanding the cultural
context within which economic change takes place. A thorough knowledge of the
indigenous institutions and of the ‘mechanism’, which is behind the social and
spiritual/cultural life of the village, is necessary when designing effective policies that
target local economic development. Therefore, the implications of the relationships
described in this paper are important for public policy makers seeking to develop strategies
for promoting gender and wage equality in both the urban and rural regions of Nigeria. By
considering the importance of complex institutions in the development process, a more
balanced picture emerges of the positive and negative effects of globalization.
Acknowledgements
The authors would like to thank the people of Umuluwe and Obigbo villages for their
patience and hospitality. They are indebted to Dr. Steve Onyeiwu for all his support during
the research visit to Igboland, for his insightful comments and suggestions, and for his kind
encouragements. Raluca Iorgulescu Polimeni would like to thank Dr. John Gowdy for his
guidance and advice.
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