Nigeria's Growth Record: Dutch Disease or Debt Overhang?

32 Pages Posted: 20 Apr 2016

See all articles by Gaobo Pang

Gaobo Pang

Northern Trust Asset Management

Nina Budina

World Bank

Sweder van Wijnbergen

Universiteit van Amsterdam; Tinbergen Institute; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: June 1, 2007

Abstract

Nigeria's oil boom has not brought an end to perennial stagnation in the non-oil economy. Is this the unavoidable consequence of the resource boom or have misguided policies contributed? This paper indicates that the extreme volatility of expenditure rather than Dutch Disease effects are behind the disappointing non-oil growth record. Fiscal policies failed to smooth highly volatile oil income; on the contrary government expenditure was more volatile than oil income. The authors provide econometric evidence showing that volatility of expenditure was increased by debt overhang problems. Moreover, they also find evidence of voracity effects that exacerbated expenditure volatility prior to 1984.

Keywords: Public Sector Expenditure Analysis & Management, Economic Theory & Research, Public Sector Economics & Finance, Markets and Market Access, Economic Stabilization

Suggested Citation

Pang, Gaobo and Budina, Nina and van Wijnbergen, Sweder, Nigeria's Growth Record: Dutch Disease or Debt Overhang? (June 1, 2007). World Bank Policy Research Working Paper No. 4256. Available at SSRN: https://ssrn.com/abstract=995077

Gaobo Pang

Northern Trust Asset Management ( email )

50 South LaSalle Street
Chicago, IL 60603
United States
3126306980 (Phone)

HOME PAGE: http://www.northerntrust.com

Nina Budina (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Sweder Van Wijnbergen

Universiteit van Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4011 / 4203 (Phone)
+31-35-624 91 82 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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