Essays on the political economy of development in Nigeria

Salihu, Muhammad Kabir and Maystadt, Jean-Francois and Bracco, Emanuele (2017) Essays on the political economy of development in Nigeria. PhD thesis, Lancaster University.

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This thesis consists of an introductory chapter, which situate the central theme of the dissertation within the intellectual frontier of political economy of development, and three distinct but related essays that addresses issues affecting the economic and political development of Nigeria. The first essay examines the political economy of intergovernmental transfers in Nigeria. Using oil windfalls as a source of exogenous variation in the political discretion an incumbent government can exert in rule-based transfers, I showed that an increase in VAT transfers induced by higher oil windfalls improves the electoral fortune of an incumbent government in the Presidential elections. This result questions the promotion of rule-based transfers as a one-fits-all institutional solution in resource-abundant countries with relatively weak institutions. The second essay exploits climatic data to study how resource inequality between ethnic groups affects the risk of violent conflicts within Nigeria. The main results show that a one standard deviation change in between-group rainfall inequality during the growing season increase the risks of civil conflicts prevalence in Nigeria by about seven percentage points. This relationship is driven, in part, by declining social capital. Specifically, I demonstrated that an unequal distribution of rainfall between ethnic groups reinforce citizen’s grievances over the government performance and creates mistrust between predominantly farming communities and those engaged in nomadic herding. The analysis highlights the need to develop conflict-sensitive mitigation and adaptation strategies to reduce the adverse effects of climatic shocks. The third essay evaluates how different punishment mechanisms may affect the incidence of bribe requests and payments. The analysis is based on a dynamic game in which the bureaucrat moves first and decides whether to solicits for bribe or not. Conditional on agents accepting to bribe, harsher punishment for corrupt bureaucrat incentivize him to angle for a larger bribe to compensate for the higher risks. I show that the effects of a switch from a fixed punishment mechanism to a proportional one that varies with the size of the bribe depend on how much effort is needed to deliver the public service. Where the delivery of public service requires much effort, the bribe becomes too expensive that only agent with larger opportunity cost of time would engage in bribing. The essay discuss the implications of the results on willingness to pay and inequality.

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Thesis (PhD)
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15 Dec 2017 09:46
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02 Jul 2024 00:56