Social and economic implications of oil policy development in Nigeria

Author: Rwabizambuga, Alexis

Source: International Social Science Journal, Volume 57, Supplement 1, May 2009 , pp. 81-91(11)

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Abstract:

National oil exploitation policies are generally designed to maximise petroleum revenues. Countries aim to control over domestic oil exploitation to ensure maximum socio-economic benefits from it. However, not all oil-producing countries can afford the same degree of control. Developing countries have historically been over-reliant on commercial stakeholders such as oil corporations and funding agencies to extract and commercialise their oil resources. This dependency often leads to protracted negotiations dominated by these powerful actors at the expense of state interests. With Nigeria as a case study, this chapter argues that the recent dynamics in the global oil industry have restored the influence of the state. The ever-increasing demand for oil has led to stiff competition for access to oil reserves, compelling investors and oil companies to court any potential oil producer, however marginal. The lack of political stability may be the main explanation for developing countries' limited leverage in negotiating extraction agreements and may have spawn the circumstances in which local institutions are too weak to make any effective use of oil proceeds for socio-economic development.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1468-2451.2009.00708.x

Affiliations: 1: Harvard University

Publication date: 2009-05-01