TY - JOUR

T1 - National or political cake?

T2 - The political economy of intergovernmental transfers in Nigeria

AU - Maystadt, Jean-Francois

AU - Salihu, Muhammad Kabir

N1 - This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Journal of Economic Geography following peer review. The definitive publisher-authenticated version Jean-François Maystadt, Muhammad-Kabir Salihu; National or political cake? The political economy of intergovernmental transfers in Nigeria, Journal of Economic Geography, , lby032, https://doi.org/10.1093/jeg/lby032 is available online at: https://academic.oup.com/joeg/article/19/5/1119/5056965

PY - 2019/9/1

Y1 - 2019/9/1

N2 - 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.

AB - 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.

U2 - 10.1093/jeg/lby032

DO - 10.1093/jeg/lby032

M3 - Journal article

VL - 19

SP - 1119

EP - 1142

JO - Journal of Economic Geography

JF - Journal of Economic Geography

SN - 1468-2702

IS - 5

ER -