1. National or political cake? The political economy of intergovernmental transfers in Nigeria
- Author
-
Jean-François Maystadt, Muhammad Kabir Salihu, and UCL - SSH/LIDAM/IRES - Institut de recherches économiques et sociales
- Subjects
Economics and Econometrics ,Economics ,media_common.quotation_subject ,Fiscal federalism ,Geography, Planning and Development ,0507 social and economic geography ,Nigeria ,Ruled-based transfers ,Politics ,Intergovernemental transfers ,0502 economics and business ,Endogeneity ,050207 economics ,Fiscal decentralization ,media_common ,Government ,05 social sciences ,Political manipulation ,International economics ,Discretion ,Variation (linguistics) ,Economic system ,050703 geography ,regional favouritism - Abstract
Rule-based intergovernmental transfers are often presented as the panacea to avoid the manipulation of transfers for political motives. We question that assertion in the case of Nigeria, where these transfers are highly dependent on natural resources and likely to be subject to elite capture. In this article, we use oil windfalls as a source of exogenous variation in the political discretion an incumbent government can exert in rule-based transfers. Exploiting within-state variation between 2007 and 2015 in Nigeria, an increase in VAT transfers induced by higher oil windfalls is found to improve the electoral fortune of an incumbent government. Our results question the promotion of rule-based transfers as a one-fits-all institutional solution in resource-abundant countries with relatively weak institutions.
- Published
- 2018
- Full Text
- View/download PDF