Politics Does Matter: The Nigerian State and Oil (Resource) Curse

Abstract

Conventional explanations of the resource curse, or the paradox of abundance, correlate resource abundance and bad economic policies, underdevelopment, poverty and conflict. Such a conclusion has become debatable and has encouraged analysts to develop conditional explanations that emphasize the role of the political rather than economic factors in the mechanisms underpinning the resource curse. Using the Inter-governmental Fiscal Relations system in Nigeria as an example, this paper argues that, while the policy choices of politicians determines how resource rents are utilized, the extent to which political institutions
promote the use of rational and meritocratic criteria in allocating public sector resources and ensure accountability is what matters. This is of crucial importance in determining whether resource abundance will lead to resource curse.