The 'Resource Curse' and Constraints to Reforming Nigeria's Oil Sector
The Oxford Handbook of Nigerian Politics, edited by Carl Levan and Patrick Ukata
Posted: 12 Aug 2019
Date Written: October 1, 2018
This book 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.
Keywords: resource curse, natural resources, extractive industries, oil sector, corruption, Nigeria, institutions, political settlements
JEL Classification: H77, L71, O55, P16, Q33, Q35, Q38
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