Fiscal Decentralization, Sub-National Governance Quality, and Multidimensional Poverty in Nigeria: A Longitudinal Causal Analysis

This dissertation conducts a longitudinal causal analysis of the relationships among fiscal decentralization depth, sub-national governance quality, and multidimensional poverty outcomes across Nigerian states and local government areas over the period 2010 to 2024. While theoretical literature posits that fiscal decentralization reduces poverty by improving public resource allocation efficiency and governance responsiveness, empirical evidence from developing country contexts, particularly at the sub-national level, remains inconclusive and methodologically contested. Employing a dynamic panel data model with instrumental variable estimation to address endogeneity between governance quality and poverty outcomes, this study draws on a novel dataset combining Revenue Mobilization Allocation and Fiscal Commission financial records, National Bureau of Statistics multidimensional poverty index data, and a newly constructed Sub-National Governance Quality Index developed for this research. Primary data supplements the quantitative analysis, gathered from 300 respondents across eighteen states through structured questionnaires and key informant interviews. The Fiscal Federalism Theory, the Governance-Poverty Nexus Model, and the Capability Approach provide the theoretical architecture. This study makes an original methodological contribution by developing and validating a replicable Sub-National Governance Quality Index for Nigerian local governments. Findings are expected to identify threshold conditions under which fiscal decentralization produces poverty-reducing outcomes, revealing that governance quality moderates the decentralization-poverty relationship in nonlinear and context-dependent ways. Policy implications target fiscal transfer reforms, local government accountability architecture, and poverty-targeted public expenditure management systems. Keywords: Fiscal decentralization, governance quality, multidimensional poverty, Nigeria, longitudinal analysis.