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Oil-dependence and Civil conflict in Nigeria

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  • Aderoju Oyefusi
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    Abstract

    This paper examines oil-dependence and civil conflict in Nigeria focusing on the economic dynamics of resource-induced conflicts. It identifies two dimensions to oil-related civil conflict in the country. The first is the violent rent-seeking political violence that oil-availability generates between the various ethno-regional groups; the second is the Niger Delta crisis. The former is linked to excessive government dependence on oil revenues, an institutionally unstable revenue allocation system, weak political institutional arrangements, lack of effective agencies of restraints to demand transparency and accountability on the part of political office holders, failure to translate oil wealth to sustainable growth and increased standard of living for a larger majority of Nigerians, and a defective property right structure in relation to mineral resource endowment. Violence in the Niger Delta area is attributed, in the main, to weak institutional arrangements manifesting in poorly-conceived laws, lack of enforcement, regulatory capture, and a marriage of interest between the State and oil companies which often encourage the State to use repressive measures against host communities in cases of disputes. There are also the looting and secession incentives as well as the rent-seeking contests that oil-availabiity and the allure of ownership creates among local participants. Three factors (educational attainment, income level and asset possession) consistently explain the propensity to general violence among individuals in the region in the Ordered and Multinomial regressions on civil disobedience. The paper concludes with a discussion of some measures that may be used to break the conflict trap and overcome the corrupting influence of oil-dependence in Nigeria.

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    Bibliographic Info

    Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2007-09.

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    Date of creation: 01 Jun 2007
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    Handle: RePEc:oxf:wpaper:wps/2007-09

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    1. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
    2. Robert H. Bates, 2006. "Institutions and Development," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 10-61, April.
    3. Michelle R Garfinkel & Stergios Skaperdas, 2001. "Conflict Without Misperceptions or Incomplete Information: How the Future Matters," Levine's Working Paper Archive 563824000000000011, David K. Levine.
    4. Skaperdas, S., 2000. "Warlord Competition," Papers 00-01-20, California Irvine - School of Social Sciences.
    5. Santhakumar, V., 2003. "Citizens' actions for protecting the environment in developing countries: an economic analysis of the outcome with empirical cases from India," Environment and Development Economics, Cambridge University Press, vol. 8(03), pages 505-528, July.
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