Substantial evidence exists to suggest that ethnicity as a socio-political fundamental has a long standing negative impact on economic development and growth of a society. Following an institutional analysis framework, this study analyzes development policy in the Nigerian State and hence proposes a policy framework that has the potential to douse the negative effects of ethnically motivated government policies that has seen the country’s economy and infrastructure in decadence. The study demonstrates that collective and inclusive action solutions to development issues and policies such as the abolishment of a multi-party state in favour of a two party state, equitable location of facilities of national interest across all the six main geopolitical zones in the country etc. have the potential of reducing ethnic rivalry and tensions thereby paving the way for sustained economic growth.

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