Sources of Economic Underdevelopment in Nigeria And Proposed Remedies

The primary focus of this work is on Nigeria, and why all attempts at economic development since gaining independence from Britain have failed to place its economy on a sustainable trajectory of growth. The operational thesis adduced is that development was, and continues to be stunted by the politically induced policy of multiple state-creation within her geographic competence with little or no consideration of the economic viability of newly created states. Using the rentier-state model as a framework for the inquiry, it examined the separate, and interactive effects of three factors -- the natural resource curse, bureaucratic corruption/rent-seeking, and decentralization -- on Nigeria's economic development. A comparative analysis of four oil-exporting countries that are similarly situated (Iran, Venezuela, Indonesia, and Algeria) is then used to provide context to Nigeria's experience.;The main findings of this study, and thus its contribution to existing literature, is that the natural resource curse, rent-seeking behavior, and bureaucratic corruption have minimal consequences in nation-states with advanced and inclusive social institutions, but are extremely damaging and disruptive in ones with weak or non-functioning social institutions that enable exclusivity in economic and political participation. The deep and extensive Dutch Disease syndrome in Nigeria is found to be immediately traceable to the creation of multiple states within a relatively short period; this enabled and sustained rent-seeking behavior amongst the political and business elites, and in due course gave rise to debilitating bureaucratic corruption that misaligned self-interest and national economic development. But more damaging to development is the finding that the creation of more states encouraged dependence on the federal government, and the country's oil revenue as the primary sources of sustenance, and thus discouraged the development of other viable sources of economic productivity. That this is the case in Nigeria is because the country's legal and social institutions are disturbingly ineffective, and malleable to corrupt influences.;Given these findings, it is thus recommended that Nigeria, in order to achieve sustainable economic development, should stop all decentralization efforts and provide an enabling environment by strengthening its social and legal institutions that encourage inclusivity, and vigorous enforcement of established rules and regulations. Only after growth-sustaining social institutions are reasonably in place would the effort to spur economic growth, through industrialization, managed international trade, and full development of the agricultural sector, be possible.