The political economy of civil rule and the economic crisis in Nigeria (1979–84)

Abstract

This paper examines the dynamic interaction of economic policy and state action with political, social and market forces during the civilian regime of President Shagari (Oct 1979 — Jan 1984). It investigates why democratic politics, or more accurately, the rule of politicians, had disastrous economic consequences. The National Party of Nigeria, which gained power as a party of national patronage, was weak and largely devoid of policies. Political competition and economic debate were constituted around the distribution of state patronage and federal state relations. The public economy and processes of policy formulation were fully exposed to the distributive demands of state patronage and electoral politics. Throughout the period, trends that were identifiable in the economic expansion of the 1970s intensified, including the loss of financial control and discipline in the public economy, the privatisation of public funds and the expansion of state employment. In Nigeria, as elsewhere, political and social processes and the institutional structure of the state have profoundly conditioned economic activity, state policies and forms of intervention. In this way they affect the allocation and use of resources, patterns of accumulation and the growth and development of the economy. At the risk of oversimplification, it is to some of these structural features that define the economic environment that this analysis will turn first. Spectacular as changes in regime and the ups and downs of the oil economy may be, it is the continuities and cumulative impact of structural features that stand out.