Tax Policy, Human Capital Investment, and Long-Run Productivity in North-Eastern Nigeria: A Dynamic Analysis

This doctoral study conducts a dynamic analysis of the relationship between tax policy design, public investment in human capital, and long-run productivity growth in the North East geopolitical zone of Nigeria, incorporating the mediating effects of conflict-induced disruptions to education and health service delivery. The North East's chronic underinvestment in human capital, compounded by a decade of insurgency-related displacement, makes it a uniquely important and theoretically challenging context for studying the tax-human capital-productivity nexus. The study develops an overlapping generations model in which tax revenues finance human capital investment, which in turn increases the productive capacity of successive generations and expands the future tax base. The model is extended to incorporate a conflict shock block that intermittently destroys human capital stock, calibrated to conflict intensity data from the Uppsala Conflict Data Programme. Empirical estimation using state-level data for Borno, Adamawa, Gombe, Taraba, Yobe, and Bauchi states over twenty years employs synthetic control methods to construct counterfactual productivity trajectories. The study expects to derive conditions under which front-loading human capital investment, even under constrained tax revenue, generates a productivity dividend that dominates the short-run fiscal cost. Original contributions include the conflict-augmented overlapping generations model and the first synthetic control productivity analysis for North East Nigeria. Keywords: tax policy, human capital, productivity, overlapping generations model, North East Nigeria.