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The Political Economy of Natural Resource FundsTo Save or Not to Save: State Governments and the Construction of Privilege Over the Creation of Oil Funds in Nigeria

The Political Economy of Natural Resource Funds: To Save or Not to Save: State Governments and... [This chapter examines the incentives provided by the constitutional division of power for the construction and maintenance of privilege over the creation of the Excess Crude Account (ECA), and the subsequent efforts to create a sovereign wealth fund (SWF) that would replace the ECA in order to give Nigeria’s oil fund necessary legal backing/political legitimacy and prevent constant state governors’ pressure to share from it. Such pressure had stalled efforts at robust saving in the ECA, and the Nigerian Sovereign Investment Authority (NSIA) with significant consequences for the country. For instance, the large drawdowns of the ECA, even during periods of high oil prices, deprived Nigeria of buffers to cushion the 2014 oil price slump, leading to deferred investments in human capital and infrastructure by federal, state, and local governments. This chapter examines the continuity and changes in the politics of privilege construction and maintenance, and the outcome of this development on the balance of power between governors and presidents, highlighting the collective action problem that policy changes and reforms face in an oil-dependent federation.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

The Political Economy of Natural Resource FundsTo Save or Not to Save: State Governments and the Construction of Privilege Over the Creation of Oil Funds in Nigeria

Part of the International Political Economy Series Book Series
Editors: Okpanachi, Eyene; Chowdhari Tremblay, Reeta
Okpanachi, Eyene
The Political Economy of Natural Resource Funds — Aug 14, 2021
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Publisher
Springer International Publishing
Copyright
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021
ISBN
978-3-030-78250-4
Pages
147 –180
DOI
10.1007/978-3-030-78251-1_7
Publisher site
See Chapter on Publisher Site

Abstract

[This chapter examines the incentives provided by the constitutional division of power for the construction and maintenance of privilege over the creation of the Excess Crude Account (ECA), and the subsequent efforts to create a sovereign wealth fund (SWF) that would replace the ECA in order to give Nigeria’s oil fund necessary legal backing/political legitimacy and prevent constant state governors’ pressure to share from it. Such pressure had stalled efforts at robust saving in the ECA, and the Nigerian Sovereign Investment Authority (NSIA) with significant consequences for the country. For instance, the large drawdowns of the ECA, even during periods of high oil prices, deprived Nigeria of buffers to cushion the 2014 oil price slump, leading to deferred investments in human capital and infrastructure by federal, state, and local governments. This chapter examines the continuity and changes in the politics of privilege construction and maintenance, and the outcome of this development on the balance of power between governors and presidents, highlighting the collective action problem that policy changes and reforms face in an oil-dependent federation.]

Published: Aug 14, 2021

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