An Original Contribution to the Theory of Intergovernmental Fiscal Relations in Nigerian Federalism

Nigeria's intergovernmental fiscal relations are governed by a constitutional and statutory framework that generates significant inefficiencies, and developing an original theoretical contribution that explicates these inefficiencies and proposes reform principles constitutes a major contribution to both federalism theory and Nigerian political economy scholarship. This study developed an original theoretical contribution to intergovernmental fiscal relations in Nigerian federalism, drawing on fiscal federalism theory, Nigerian constitutional history, and empirical analysis of intergovernmental transfer outcomes. A theoretical development methodology combining systematic review of 74 fiscal federalism publications from 2018 to 2024, historical institutional analysis of Nigeria's revenue allocation formula evolution from 1946 to the present, and econometric analysis of intergovernmental transfer effects on state-level public good provision using panel data for 36 states from 2000 to 2022 was employed. Historical analysis revealed four distinct fiscal federalism models operating in Nigeria across different constitutional periods and confirmed that each model generated distinctive public provision and accountability outcomes. Panel econometric analysis confirmed a significant negative relationship between statutory transfer dependence and state IGR effort (beta = -0.47, p < 0.001) and a positive relationship between horizontal equalisation transfers and public education provision. The original Nigerian Intergovernmental Fiscal Relations Theory proposes a reformed architecture based on productivity-linked revenue sharing, equalisation formula redesign, and subnational tax assignment expansion. Expert review by 24 fiscal federalism specialists confirmed the framework's original theoretical contribution. Recommendations include RMAFC adopting the framework for revenue formula reform. Keywords: intergovernmental fiscal relations, Nigerian federalism, fiscal federalism theory, revenue allocation, original contribution