from Dr. Morrison Muleri

I believe the article contributes to public awareness amid the numerous reports in the Kenya media on corruption, abuse of public resources and questionable accumulation of wealth.

I will be delighted to provide any further information / clarification you may require.

Morrison Muleri, PhD

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Understand why they abuse and steal your money

By Morrison Muleri*

What really keeps you awake at night? Do you ever find yourself sleepless and wondering how a person, any person, could accumulate that US$10 million, yes, that is right, Kshs 800 million in that bank account overseas? Or how a servant of the people amassed Kshs 2 billion, yes, that is right Kshs 2,000 million of investments that the family is feuding over? These figures and how people amass them is mind boggling, but allow me to develop an argument to explain why people of lesser moral compass do it.

I will not bore you with countless theories, scientific or otherwise, of why people abuse or steal your money. I will only borrow from three theories and simplify them as much as possible. Of course, I will be very blunt about it too. To start off, let me answer that question from the outset: they abuse and steal your money because of exactly that; it is yours and not theirs. How much of it they abuse or steal depends on their station on the social ladder of needs. The richer they are, the more they abuse or steal. Let nobody tell you it is the other way round or more complex than that. But do not just take my word for it, allow me to explain.

There is a theory I really like that explains how people spend money. It says simply that how one spends money depends on whose money it is they are spending, on whom, and for whose benefit. In essence, this puts forth three competing scenarios. Whose money? It can be mine, yours, ours or somebody else’s. On whom? It can be on oneself or on somebody else. For whose benefit? It could be for one’s own benefit or for the benefit of another.

Human nature dictates that our behavior with money changes as those scenarios change. Have you realized that when you take your girlfriend out she usually goes for the expensive stuff (food, drink, dress etc)? A beer drinking girl suddenly turns to red wine and seems to value it more as the price rises. Instead of settling for nyama choma at Sagret, she wants it at Carnivore. If you give her the money outright to treat herself, all that changes and she becomes herself again. Why? Because she is no-longer spending “your” money but “her” money! Give her the same money but tell her to treat herself and to bring you back the receipts and change. Suddenly, she reverts to wine and carnivore, or fake receipts from there. I am no exception. When travelling on my employer’s business I insist on business class air travel. A return ticket costs over Kshs 500,000 between Washington DC and Nairobi. I insist on staying at a 4 or 5-star hotel at over Kshs 15,000 per night. When I come home on my own dollar I always travel economy class at a cost of Kshs 100,000 and I stay at 3-star hotels at Kshs 5,000 per night. In both cases the same level of effectiveness is achieved; I travel safely and stay comfortably. Let me not get ahead of myself by delving into efficiency and economy now. Take another example, when I lived in London I would bring a friend a suit from Shepherd’s Bush that cost a modest £129 or Kshs 17,000. One time I deliberately failed to and instead gave him the equivalent Kshs 17,000 to expressly “buy a suit”. He confessed a week later that he bought one at BR Tank at Kshs 7,000 and used the balance on other “more important” things. I am glad I did not accompany him to buy the suit. If I did, I bet we would end on the other side of Moi Avenue and spent thrice the amount on a suit.

The second theory I want to build on is the “value for money” theory which states that we get the most out of money if it delivers effectiveness, efficiency and economy, or simply the “3Es”. Effectiveness is getting done what you really want to do. If I want my sick son to get well, I can take him to hospital, pay a doctor to treat him and buy him medicines the doctor prescribes. If my son heals, I have used my resources effectively. Efficiency has to do with how much less of it I use to achieve that objective. I could take my son in a helicopter to Nairobi Hospital and get him treated at a cost of Kshs 100,000. I could hire a car and get him to Mater Mission Hospital and get him treated at a cost of Kshs 50,000. Or I could take him to Kenyatta National Hospital, in a matatu and have him treated at Kshs 10,000. The last option achieves the same objective at least cost and it is therefore the most efficient. Finally economy is all about avoiding waste. Can I get my son treated without losing resources like time, medicines or paying medical or traffic staff a bribe? If I avoid unnecessary leakage then I have achieved economy. So, if my son heals in all three cases then taking him to KNH best observes the 3Es just as my economy class travels to Nairobi and accommodation at 3-star hotels, your girlfriend’s beer and nyama choma at Sagret and my friend’s suit at BR Tank are.

In general, when the theory of value for money is superimposed on the theory of how people spend money, three scenarios arise.

Scenario one: when one spends his own money on himself or on somebody else but for his own benefit, he aims to achieve all the 3Es.

Scenario two: when one spends someone else’s money on himself and for his own benefit, only effectiveness matters.

Scenario three: when one spends somebody else’s money on another person and for that other person’s benefit then none of the 3Es matters.

To use examples above to drive the point home, when you spend your own money on a treat or when you gave it outright to your girlfriend to spend or when I gave it to my friend to buy a suit; all fall squarely in the first scenario and you will behave the way I did when I took my son to KNH or when I visit home on my dollar.

When we give our MPs the power to decide how we should use our money and to determine their own remuneration or when I travel on my employer’s dollar or bring my friend London suits; all fall squarely in scenario two and all that matters to them is effectiveness. They behave as I do when I travel on my employer’s dollar or when your girlfriend dines and wines at Carnivore. That is why you hear MPs say the roads are so bad they should fly or be bought state-of-the-art 4×4 vehicles. For the middle class taxpayer, your option is to park your car and use public means to cut costs.

You can actually change their behavior to some extent. When I worked as an accountant, we reduced company costs and enhanced staff morale by terminating accommodation on employer’s shilling and decided to give staff a lower than top hotel rate but outright fixed allowance. We simply turned it from being company’s, or someone else’s money, to being their money and thereby widened focus from effectiveness to 3Es. Similarly, I opine, you can change behavior of MPs by taxing them so that in their eyes state resources become “our” money rather than “their” money.

The civil servant, CDF official and some foreign-funded NGOs are in a class of their own. They are in scenario three where they spend somebody else’s (government, donors) money on somebody else (citizens, institutions etc) for somebody else’s benefit (Kenyan citizens). They therefore have no motivation for any of the 3Es. Have you ever wondered why donors who give funds to NGOs run by their fellow countrymen do not worry at all about governance as they do when the NGO is run by locals? Here is your answer. An Irishman running an NGO in Turkana is in scenario one as Irish donor / tax payers while the local manager is in scenario three. At an international NGO in Nairobi we fought for Land Cruisers while the expatriates accused us of not being cost-conscious and insisted on 1600cc Toyota Corollas. A top civil servant or cabinet minister can travel first class to London at Kshs 500,000, draw a per diem of Kshs 25,000 per day, stay for a week and come back empty handed having failed to meet his British Government counterparts (none of the 3Es observed!).

The last theory I want to draw on is “Maslow’s Hierarchy of Needs” theory. It states that we yearn for different things at different stages on the ladder of life. Our needs range from basic physiological needs, safety, love, esteem to self-actualization. Initially we just want food, water and shelter then as we grow rich we switch to love and recognition. At the apex we want self actualization or to shape destiny for others. You want to be “the go to” guy that power and action gravitates around.

If you add this theory to the first two I discussed above, it starts to make sense why they abuse or steal as much they do. A junior civil servant will go for Kshs 10,000 to send a kid to school or Kshs 50,000 to buy a plot. That is his station on that ladder. Wow unto you if the person is of lesser moral compass, is in scenario three and rich or high on that ladder. He is then thinking of how to finance an election to become an MP, a senator, a president and that may as well cost over Kshs 10m. You can bet that he will only negotiate deals of Kshs 100,000 and above. Have you not heard them say some people in parliament are cheap because they can be bought at Kshs 100,000 and you wonder is that really cheap? Have you not heard some people can afford to spend Kshs 10,000 on lunch? That is where fat cats and big fish are on life’s ladder and they can suck us dry to whet their appetites.

Now you know why your girlfriend and my friend act rich when you pay and normal when they do, why I fly and stay high class on my employer’s dollar, why the clerk in DC’s office only wants “harambee” or “airtime” of Kshs 500, why top guys abuse and steal big bucks, and why MPs award themselves salaries of Kshs 1 million monthly and resist paying tax on them. You can use this template to make sense of many behaviors around you, including the $10 million in an overseas bank account and the Kshs 2 billion the family is feuding over.

In a nutshell, they abuse and steal your money because it is in scenarios two and three. And because it is there, they have no motivation for all the 3Es. How much of your money they abuse and steal depends on where they are on Maslow’s ladder of needs; the higher up they are the more they will abuse and steal. One of the ways to curb this is to move resources from scenario three to one, or at least two. This is not a sweeping thesis, it holds where those involved are rational and with lesser moral compass.

*The author is a chartered accountant and holds an MBA and a PhD in measurement of development effectiveness besides other qualifications. He works for a leading international development agency in Washington DC. The views and interpretations expressed in this article are entirely his own. They do not represent the views of any institution, person or body to which the author is affiliated. The author can be reached at mmuleri@yahoo.com