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TitleIs there an “invisible hand” in the formula-based intergovernmental transfers in Nigeria?
Author(s)Taiwo, Kayode Olugbenga
Veiga, Linda Gonçalves
KeywordsFiscal federalism
Intergovernmental transfer
Political targeting
Panel data
Issue date2020
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
JournalNIPE Working Paper
Abstract(s)Intergovernmental transfers are susceptible to the tactical influence of the transfer-giving government notwithstanding the institution of a formula-based system under the control of an independent institutional body. This study explores the arrangement of intergovernmental transfers in Nigeria, where the formula-based system under the control of a constitutionally recognised body is in place, using the data from the year 2007 to the year 2016. The general conclusion from this study does not support equity considerations but rather tactical manipulation in intergovernmental transfers. Results suggest that states with poor fiscal capacity, especially the rural and less developed states, receive lower transfers per capita, contrary to equity considerations. There is evidence that transfers to states under the control of opposition parties and term-limited governors are lower. Additionally, transfers are strategically increased to all states during election periods possibly for the federal government’s political base enlargement and strengthening.
TypeWorking paper
Publisher version
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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