In Africa, almost every person is the center of a series of concentric circles-the immediate family, the extended family, the clan, the ethnic group and, at the outermost ring, the nation. All of these entities impose demands on the individual that are often contradictory; being true to one set of demands often means being false to another.

Prior to the General Elections of 1997, a certain Engineer Rotich-a senior officer in the Ministry of Public works-commandeered all of the road building machinery from the ministry and brought it to his rural home at Kipkelion. He then repaired all the roads in the area. Immediately afterwards, he resigned from his position in the civil service and was elected unopposed as a member of Parliament and appointed to the office of Assistant Minister.

Engineer Rotich had a duty to follow the project schedules laid out by the ministry. which did not include his ad hoc excursion in Kipkelion. However his political ambitions and the need to establish a "development record" in his home area demanded that he abuse state resources in order to conduct his little project.

The Kenyan state has a stake in nearly every sector of the economy; power generation, telecommunications, banking, agriculture, transport, oil refining etc. Appointments to lead state-owned organizations are made on political grounds and thus offer an ideal opportunity for the formation of patronage networks. In addition, these organizations do not need to generate any profits since any revenue shortfalls will simply be met by state subsidies paid for by taxpayers. The result is a waste of public funds, and state owned corporations that are badly managed so that they deliver inefficiently or completely fail in delivering.

In a typical scenario, a "homeboy" is appointed, say, the Minister of Finance. Within half a second, one of his village playmates has been elevated to the office of chairman of the board at some state-owned bank. Shortly thereafter, a long queue of "politically correct" individuals forms around the block, waiting to receive loans they have no intention of ever repaying. Inevitably, the bank is brought to the brink of collapse by these non-performing loans, and the government is forced to step in with a rescue package in order to maintain some semblance of public confidence in the banking sector.

In the short term, the economic interests of those who can milk the system are served by such arrangements. In the long term, everyone gets the shaft. In a nation where the banking system is on the verge of collapse, the physical infrastructure is crumbling, and a reliable supply of electricity is only a rumor, economic growth will simply not be realized. The resulting poverty and unemployment will create instability and a high incidence of crime. Thus, even in a plush compound surrounded by stone walls, an electric fence, razor wire and scores of ferocious hounds on patrol, one can scarcely feel safe despite the millions illegaly stashed in one's Swiss bank account.

At the center of the concentric rings that surround the individual in Kenya is the self. Self-interest is indeed a powerful motivation. If all of these state-owned enterprises were privately held, it would be in the owners' best interests to earn a return on their investment. The need to generate profits would be an incentive for these enterprises to serve their customers beneficially. Even if the owners of such an enterprise want to help out their homeboys, they would have to seek qualified ones or risk hiring people who could run the enterprise into the ground. In the face of contradictory obligations, the owners would be forced to make decisions based on their self-interest and reject projects that could hurt profits. As a result, the enterprise would deliver quality services to the people.

Ten years ago, if you wanted a telephone line, you would have had to wait for a year or more to receive the service. Today, you can have a fully functioning mobile phone within an hour. Behind this transformation is the liberalization of the telecommunications sector that has occurred in the last decade. The entry of two private mobile phone companies into the market has led to great innovation in the industry as well as ubiquity of phone service; the nightmare of long-distance calling within Kenya is a thing of the past. Privatization and the spur of competition-in short the miracle of free enterprise-can be credited with these developments.

It may be possible to find a well-run public enterprise in Kenya today. However, even if such an enterprise is found, it would be an exception to the rule. It is wiser to rely on private enterprises where well-run operations are the rule rather than the exception.

In the case of the mobile phone companies, private interest is in harmony with the public interest. The desire to turn a profit facilitates the creation of an effective telecommunications network. People will typically act in accordance with their private interests. If these interests are aligned with the public interest, it will benefit all. However, if they are not in harmony, the public interest will be undermined. Thus, the privatization of state-owned enterprises can serve as a means to bring private and public interest in line.