Michael J. Watts
This chapter is an exploration of the relations between the country’s ecology, environmental governance, and political economy. It is structured around several themes. First, an analysis of one of Nigeria’s major environmental ecological challenges—the fate of Nigeria’s forests. A second theme places Nigeria’s current environment problems on a larger historical landscape. A third explores the relations between the rise of Nigeria as a petrostate and its calamitous consequences for Nigeria’s environment. And a final section examines two regional insurgencies: the Movement for the Emancipation of the Niger Delta (MEND) in the oil-producing Niger Delta; and Boko Haram in the northern drought-prone savannas. These two episodes of violent politics shed light on the relations between environment, resources, and Nigeria’s political economy; how questions of access to and control over resources and the environment enter into the often violent dynamics of postcolonial Nigerian politics and power.
Through cycles of civilian and military government, Nigeria’s political leadership has prioritized gaining access to revenue in order to distribute resources via patronage systems. As a result, the desire of elites to access the primary mode of revenue generation motivates political choices to centralize power in the national government or disperse authority through the federal system. This chapter provides an overview of how political and fiscal federalism have evolved in postcolonial Nigeria. Up until the Fourth Republic, the central government has dominated revenue extraction and policymaking, all at the cost of subnational autonomy and institutional capability. More contemporarily, as we see subnational governments strengthening their capacity to mobilize non-oil income (via taxation), state and local governments could potentially reassert their autonomy in Nigeria’s political system.
Kingsley C. Moghalu and Nonso Obikili
This chapter explores the history and challenges of fiscal policy in Nigeria. It examines fiscal policy since independence in 1960 up until contemporary times. It explores the transition from an agriculture and trade-dominated government to the rise of crude oil as an important and dominating part of government revenues, and the subsequent effects the boom and bust of the crude oil commodity cycles have had. The chapter cycles through the conditions that led to the first oil boom and crash in the late 1970s, the difficult decades of adjustments that followed, and the fiscal reforms enacted during the democratic years. The chapter examines strategies that have been put in place at various points in time and explores the risks for fiscal policy going forward.
Peter M. Lewis
Petroleum has been key to Nigeria’s political economy since the 1970s, giving rise to a syndrome called the “resource curse.” This includes a revenue monoculture, procyclical policies, endemic corruption, political uncertainty, communal tensions, and heightened conflict. The resource curse concept is organized around shifting elite bargains for the mediation of state-controlled rents. Analyses of the resource curse emphasize structural continuity, yet the syndrome is not immutable, as political interests and institutions may lead to different outcomes. Nigeria’s two petroleum booms illustrate the influence of political factors. Both were framed by abrupt windfalls, volatility, and equally sudden declines in revenue. While the first boom culminated in prolonged economic decline, the second was followed by transient recession and resilient performance in the non-oil economy. This chapter argues that electoral politics and civic participation have shifted elite incentives toward more responsive policies, though these factors are insufficient to shift the political settlement toward an inclusive developmental model.
Ronen Mandelkern and Michael Shalev
Israel’s political economy has been transformed since the 1980s from a developmental to a neoliberal model. This chapter describes and explains this transformation, emphasizing the unevenness and incompleteness of liberalization and its impact on socioeconomic inequality. Adopting a historical-institutionalist perspective to explain both the rise of Israeli neoliberalism and its unevenness, the chapter argues that liberalization was led by economic technocrats in state agencies, who were guided by liberal economic ideas and simultaneously pursuing their interest in greater authority and autonomy. The technocrats were empowered by re-engineering economic policy institutions and cooperating with other political actors. However, their ability to fulfill the goal of technocratic management of a competition-driven economy was limited by the continuing power of some sectors of both business and labor and the continuing vibrancy of the state’s national and military projects. The conclusion discusses recent challenges to neoliberalism in Israel as a result of public discontent and conflict between state actors.
Rethinking the Institutional Foundations of China’s Hypergrowth: Official Incentives, Institutional Constraints, and Local Developmentalism
Fubing Su, Ran Tao, and Dali L. Yang
This article examines the institutional foundations of the remarkable growth of the Chinese economy, paying particular attention to official incentives, institutional constraints, and local developmentalism. It begins by outlining two approaches that explain the role of local officials as agents of economic growth: the fiscal incentives approach, which views local officials as revenue maximizers; and the fiscal federalism approach, which views officials as promotion maximizers. It then discusses the tournament thesis based on Chinese policy and empirical data before proposing a three-pronged framework that analyzes China’s political economy and explains why the country’s revenue-maximizing local officials have pursued a particular form of developmentalism since the early 1990s. This framework takes into account a number of phenomena in China’s economic development and transition, including massive industrialization and urbanization, local protectionism, the privatization of state-owned enterprises, and the rise of TVEs (township and village enterprises).
Tax and revenue have shaped and reshaped Nigeria’s administration, institutions, and practices and informed the way that governance and power have been created and understood by ordinary people. This chapter traces that journey from colonial experiments, through agricultural boom and bust, then to oil-reliance and centralization, and afterwards to the renegotiations involved in the transition back to democracy, before concluding in an examination of contemporary Nigeria. Today the country finds itself in a situation where the federal government and states alike are searching for new sources of revenue as oil prices slump, provoking new negotiations of the social contracts between government and citizens.
This chapter analyzes the dysfunctions of Nigeria’s oil sector, often framed as the “resource curse.” The resource curse thesis has for long been employed to explain the developmental challenges of veteran oil and mineral exporters such as Nigeria. This chapter examines the weaknesses of the resource curse thesis especially its commodity determinism, and argues for a political economy approach for a more encompassing understanding of the political constraints to reforming Nigeria’s oil sector. Using a political settlements framework, the chapter argues that the horizontal elite, vertical societal, and external constraints on successive ruling elites generate suboptimal policy choices for the oil industry. These political constraints generate competitive, distributional, and fiscal pressures from key stakeholders on Nigeria’s ruling elite towards these suboptimal policy choices. The analysis here covers the twenty-first century, from 1999, when Nigeria transitioned to electoral democracy.