IDEAS home Printed from https://ideas.repec.org/a/jfr/ijfr11/v12y2021i1p111-122.html
   My bibliography  Save this article

Sources of State Revenue and State Effectiveness: The Nigerian Experience

Author

Listed:
  • Ebi Bassey Okon
  • Nyong Saviour Okon

Abstract

Ineffectiveness of states has been linked to poor fiscal-social contract between states and her citizens which is a consequence of how states raise her revenues. Hence, this paper examines the relative impacts of earned and unearned revenues on different measures of state effectiveness in terms of provision of basic public goods and development of economic and political institutions in Nigeria over the period 1996 to 2018, using Autoregressive Distributive Lag (ARDL) estimation technique. The paper found that, on one hand, an increase in earned revenue instigates improvement in provision of health care, while increase in unearned revenue had no significant impact on provision of health. On the other hand, a one-percent (1%) increase in earned revenue had a greater impact on educational enrollment than a 1% increase in unearned revenue. Increase in earned revenue increases state effectiveness while increase in unearned revenue reduces state effectiveness. The paper concludes that, the effectiveness of Nigerian government in provision of basic public goods and development of strong economic and political institutions might improve if government increases their financial resources through taxes than increase in oil revenue.

Suggested Citation

  • Ebi Bassey Okon & Nyong Saviour Okon, 2021. "Sources of State Revenue and State Effectiveness: The Nigerian Experience," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 111-122, January.
    • Handle: RePEc:jfr:ijfr11:v:12:y:2021:i:1:p:111-122
    DOI: 10.5430/ijfr.v12n1p111
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/19771/12087
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/19771
    Download Restriction: no
    File URL: https://libkey.io/10.5430/ijfr.v12n1p111?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. AlÌcia Adserý, 2003. "Are You Being Served? Political Accountability and Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(2), pages 445-490, October.
    2. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    3. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies, vol. 22(4), pages 570-615, August.
    4. Zhuravskaya, Ekaterina V., 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Journal of Public Economics, Elsevier, vol. 76(3), pages 337-368, June.
    5. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    6. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
    7. Bassey Okon Ebi & Peter Samuel Ubi, 2017. "Education Expenditure and Access to Education: Case Study of United Nations Educational, Scientific and Cultural Organization Declaration in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 290-298.
    8. Ross, Michael L., 2004. "Does Taxation Lead to Representation?," British Journal of Political Science, Cambridge University Press, vol. 34(2), pages 229-249, April.
    9. Dincecco, Mark, 2015. "The Rise of Effective States in Europe," The Journal of Economic History, Cambridge University Press, vol. 75(3), pages 901-918, September.
    10. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 158-183, December.
    11. Paler, Laura, 2013. "Keeping the Public Purse: An Experiment in Windfalls, Taxes, and the Incentives to Restrain Government," American Political Science Review, Cambridge University Press, vol. 107(4), pages 706-725, November.
    12. Bassey Okon Ebi & Oluwafemi Ayodele, 2017. "Tax Reforms and Tax Yield in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 768-778.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    2. Simplice A. Asongu & Samba Diop, 2022. "Resource Rents and Economic Growth: Governance and Infrastructure Thresholds," Working Papers of the African Governance and Development Institute. 22/072, African Governance and Development Institute..
    3. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    4. Oskar Nupia, 2017. "Income Taxes, Political Accountability and Public Goods Provision," Documentos CEDE 15835, Universidad de los Andes, Facultad de Economía, CEDE.
    5. Adrian Boos & Karin Holm‐Müller, 2012. "A theoretical overview of the relationship between the resource curse and genuine savings as an indicator for “weak” sustainability," Natural Resources Forum, Blackwell Publishing, vol. 36(3), pages 145-159, August.
    6. Antonakakis, Nikolaos & Cunado, Juncal & Filis, George & Gracia, Fernando Perez de, 2017. "Oil dependence, quality of political institutions and economic growth: A panel VAR approach," Resources Policy, Elsevier, vol. 53(C), pages 147-163.
    7. Matthias Busse & Steffen Gröning, 2013. "The resource curse revisited: governance and natural resources," Public Choice, Springer, vol. 154(1), pages 1-20, January.
    8. Jonathan L. Weigel & Elie Kabue Ngindu, 2023. "The taxman cometh: Pathways out of a low‐capacity trap in the Democratic Republic of the Congo," Economica, London School of Economics and Political Science, vol. 90(360), pages 1362-1396, October.
    9. Henri, Pr Atangana Ondoa, 2019. "Natural resources curse: A reality in Africa," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    10. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    11. Adams, Dawda & Ullah, Subhan & Akhtar, Pervaiz & Adams, Kweku & Saidi, Samir, 2019. "The role of country-level institutional factors in escaping the natural resource curse: Insights from Ghana," Resources Policy, Elsevier, vol. 61(C), pages 433-440.
    12. Jeffrey Frankel, 2014. "Mauritius: African Success Story," NBER Chapters, in: African Successes, Volume IV: Sustainable Growth, pages 295-342, National Bureau of Economic Research, Inc.
    13. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.
    14. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    15. Kantorowicz, Jarosław & Köppl–Turyna, Monika, 2019. "Disentangling the fiscal effects of local constitutions," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 63-87.
    16. Joya, Omar, 2015. "Growth and volatility in resource-rich countries: Does diversification help?," Structural Change and Economic Dynamics, Elsevier, vol. 35(C), pages 38-55.
    17. Abdih, Yasser & Chami, Ralph & Dagher, Jihad & Montiel, Peter, 2012. "Remittances and Institutions: Are Remittances a Curse?," World Development, Elsevier, vol. 40(4), pages 657-666.
    18. Harashima, Taiji, 2017. "Should a Government Fiscally Intervene in a Recession and, If So, How?," MPRA Paper 78053, University Library of Munich, Germany.
    19. Giulia Mascagni, 2018. "From The Lab To The Field: A Review Of Tax Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 273-301, April.
    20. Sandbu, Martin E., 2006. "Natural wealth accounts: A proposal for alleviating the natural resource curse," World Development, Elsevier, vol. 34(7), pages 1153-1170, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:ijfr11:v:12:y:2021:i:1:p:111-122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gina Perry (email available below). General contact details of provider: http://ijfr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.