Political economy of the petroleum sector in Nigeria
AbstractThe relatively slow pace of Nigeria's development has often been attributed to the phenomenon of the resource curse whereby the nature of the state as a"rentier"dilutes accountability for development and political actors are able to manipulate institutions to sustain poor governance. The impact of the political elite's resource-control and allocation of revenues on core democratic mechanisms is central to understand the obstacles to development and governance failure. Given that problems of petroleum sector governance are extremely entrenched in Nigeria, the key question is whether and how it is possible to get out of a poor equilibrium after fifty years of oil production. This paper uses a political economy perspective to analyze the governance weaknesses along the petroleum sector value chain and attempts to establish the links between challenges in sector regulation and the following major political and economic attributes: (i) strong executive control on petroleum governance in a political environment of weak checks and balances; (ii) regulatory and operating roles bundled into one institution, thereby creating conflict of interest; and (iii) manipulation of elections and political appointments. The restoration of democratic government has helped improve transparency and management of oil revenue and reforms at the federal level and proposed reforms of the petroleum sector hold much promise. At the same time, the judiciary has started to restore confidence that it will serve as a check and balance on the executive and the electoral process. Yet, these reforms are fragile and need to be deepened and institutionalized. They must be addressed not as purely technocratic matters but as issues of political economy and vested interests that must, through regulation and reform, be aligned with the public interest and a vision of Nigerian development.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5779.
Date of creation: 01 Aug 2011
Date of revision:
National Governance; Environmental Economics&Policies; Oil Refining&Gas Industry; Energy Production and Transportation; Public Sector Corruption&Anticorruption Measures;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-08-29 (Africa)
- NEP-ALL-2011-08-29 (All new papers)
- NEP-ENE-2011-08-29 (Energy Economics)
- NEP-HME-2011-08-29 (Heterodox Microeconomics)
- NEP-POL-2011-08-29 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Xavier Sala-i-Martin & Arvind Subramanian, 2003.
"Addressing the Natural Resource Curse: An Illustration from Nigeria,"
NBER Working Papers
9804, National Bureau of Economic Research, Inc.
- Xavier Sala-i-Martin & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Discussion Papers 0203-15, Columbia University, Department of Economics.
- Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse: An Illustration from Nigeria," IMF Working Papers 03/139, International Monetary Fund.
- Xavier Sala-i-Martín & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Economics Working Papers 685, Department of Economics and Business, Universitat Pompeu Fabra.
- Freinkman, Lev, 2007. "Intergovernmental relations in Nigeria: improving service delivery in core sectors," MPRA Paper 10032, University Library of Munich, Germany.
- Kolstad, Ivar & Søreide, Tina, 2009. "Corruption in natural resource management: Implications for policy makers," Resources Policy, Elsevier, vol. 34(4), pages 214-226, December.
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