Developing an Original Theoretical Framework for the Resource Curse in Sub-National Nigerian Economies

The resource curse theory predicts that natural resource abundance produces perverse economic outcomes, but its application to sub-national contexts in Nigeria, where oil revenues flow through federal allocation rather than directly to states, requires original theoretical development that accounts for the indirect fiscal transmission of oil dependence. This study developed an original Sub-National Resource Curse Framework for Nigerian states, drawing on theoretical analysis, empirical grounding across six geopolitical zones, and expert validation. A constructive theoretical methodology was employed, combining systematic review of 84 resource curse theory publications from 2018 to 2024, empirical analysis of panel data for 36 states and FCT, and expert consultation with 25 development economists. Systematic review confirmed that existing resource curse frameworks inadequately theorised the indirect fiscal channel through which oil revenues flow to non-oil states, the political economy of intergovernmental transfer dependence, and the heterogeneous development outcomes among oil-producing states themselves. Original empirical panel data analysis covering 2000 to 2022 confirmed that states with higher oil-derived statutory allocation shares showed lower non-oil sector development, weaker IGR performance, and higher governance quality deficits after controlling for income level. The original Sub-National Resource Curse Framework proposes four analytical dimensions: fiscal dependence (the substitution of transfers for tax effort), institutional atrophy (weakening of state capacity for productive economic governance), investment misallocation (directing spending toward non-productive patronage), and diversification inertia (political economy barriers to non-oil sector development). Expert review by 22 specialists confirmed the framework's original theoretical contribution.

Keywords: resource curse, sub-national economies, Nigerian states, fiscal federalism, original framework