June 2003 | Xavier Sala-i-Martin, Arvind Subramanian
Nigeria's economic performance since independence has been poor, with per capita GDP stagnating and poverty rates rising sharply. Oil revenues have not translated into improved living standards, and the country has suffered from institutional weaknesses and corruption. The paper argues that the natural resource curse is not unique to Nigeria but is a broader phenomenon, with natural resources negatively affecting growth through institutional degradation. The key issue in Nigeria is the inefficient use of oil revenues, which has led to poor economic outcomes. The paper proposes a solution: distributing oil revenues directly to the public to improve institutional quality and reduce corruption. This approach would be more effective than the current system, as it would reduce the incentives for corruption and improve public institutions. The paper also highlights the importance of addressing the nonlinear effects of natural resources on growth and the role of institutional quality in determining economic outcomes. The findings suggest that oil and minerals have a more significant negative impact on growth than other natural resources, and that the impact is nonlinear. The paper concludes that the best way to address the natural resource curse is to distribute oil revenues directly to the public, which would improve institutional quality and reduce corruption. This approach would be more effective than the current system, as it would reduce the incentives for corruption and improve public institutions. The paper also emphasizes the importance of addressing the nonlinear effects of natural resources on growth and the role of institutional quality in determining economic outcomes. The findings suggest that oil and minerals have a more significant negative impact on growth than other natural resources, and that the impact is nonlinear. The paper concludes that the best way to address the natural resource curse is to distribute oil revenues directly to the public, which would improve institutional quality and reduce corruption.Nigeria's economic performance since independence has been poor, with per capita GDP stagnating and poverty rates rising sharply. Oil revenues have not translated into improved living standards, and the country has suffered from institutional weaknesses and corruption. The paper argues that the natural resource curse is not unique to Nigeria but is a broader phenomenon, with natural resources negatively affecting growth through institutional degradation. The key issue in Nigeria is the inefficient use of oil revenues, which has led to poor economic outcomes. The paper proposes a solution: distributing oil revenues directly to the public to improve institutional quality and reduce corruption. This approach would be more effective than the current system, as it would reduce the incentives for corruption and improve public institutions. The paper also highlights the importance of addressing the nonlinear effects of natural resources on growth and the role of institutional quality in determining economic outcomes. The findings suggest that oil and minerals have a more significant negative impact on growth than other natural resources, and that the impact is nonlinear. The paper concludes that the best way to address the natural resource curse is to distribute oil revenues directly to the public, which would improve institutional quality and reduce corruption. This approach would be more effective than the current system, as it would reduce the incentives for corruption and improve public institutions. The paper also emphasizes the importance of addressing the nonlinear effects of natural resources on growth and the role of institutional quality in determining economic outcomes. The findings suggest that oil and minerals have a more significant negative impact on growth than other natural resources, and that the impact is nonlinear. The paper concludes that the best way to address the natural resource curse is to distribute oil revenues directly to the public, which would improve institutional quality and reduce corruption.