National or political cake?:The political economy of intergovernmental transfers in Nigeria

Maystadt, Jean-Francois and Salihu, Muhammad Kabir (2019) National or political cake?:The political economy of intergovernmental transfers in Nigeria. Journal of Economic Geography, 19 (5). 1119–1142. ISSN 1468-2702

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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.

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Journal Article
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Journal of Economic Geography
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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, is available online at:
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07 Sep 2018 11:18
Last Modified:
11 Jun 2022 00:04