The price of your Member of Parliament’s vote on ‘nani’

If you understand and appreciate the power of incentives then you understand how the world really works. People’s behavioural outcomes are more or less a consequence of the incentives that lead to alternative outcomes. For instance, why would I want to take my kids to school? Or why does a peasant not grow more food than he needs to feed his family? All these questions are a function of the incentives and utility derived from a particular decision.

My sister from Rubaga North understands this and she was quick off the mark to stake her claim. According to one widely circulated newspaper, she bestowed the title of ‘wisest man in Singapore’ on her boss.
True, most women like saying that to the men they love even when they don’t really mean it! I see nothing wrong with my sister’s declaration, in the grand scheme for incentive hunting. It is called ‘strategy’.

There are about 427 Members of Parliament who will vote on the ‘nani’ (sorry if you don’t know it, but we are really not supposed to be talking about it) and therefore have the most skin in the game.
The guys who voted on the removal of term limits seem to have undersold themselves because they did not seem to understand the market for political power or have a ‘strategy’.

Since the ‘nani’ vote is going to take place and be successful anyway because it will be through an open ballot, why not cash in? I have made a back of the envelope calculation to guide these 427 honourable members. If their brains and hearts are in the right place, this rough guide can help you cash in. The approximate key numbers on which I base my calculation are in the table below.

In order to make these kinds of calculations meaningful, you have to make some assumptions. The first is that Bobi Wine’s compatriots will replace 40 per cent of the incumbents. For this cohort (40 per cent), the computation is based on discounting the Shs3.3 billion earnings foregone. Assuming a discount rate of 30 per cent (since this is very risky business), then the discounted value of your vote is about Shs891 million in today’s money. But remember you will become an ordinary chap like most of us, and that is difficult to price.

If you are among the 60 per cent that will be returned, then there is no opportunity cost for you since you will get the same or higher earnings in the next Parliament (your first duty is to fix your remuneration).

But it is still dicey because you may annoy some of your constituents by voting for the ‘nani’. Secondly, how do you know you will be returned? So you must hedge your bet and assume you are not coming back. In which case you should also just demand for Shs891 million.

And there you have my qualified accountant’s advice. Just remember free advice is usually hogwash. You still have to work out your own price for the ‘kithingi’! Just don’t get short changed.

Prof Sejjaaka is country team leader at Abacus Business School. [email protected]
@samuelsejjaaka