From resource curse to institutional incompatibility: a comparative study of Nigeria and Norway oil resource governance

ABSTRACT This article seeks to address a policy quandary: despite Nigeria’s history of oil exploitation since 1956 and institutionalization of the Nigeria Extractive Industry Transparency Initiative (NEITI) in 2004, why has the country not been able to address the resource wealth–poverty dilemma? Is it that the EITI’s governance model is too Western to address Nigeria’s resource curse? It has been established that a country’s propensity to integrate EITI principles in the oil industry is largely dependent not only on the existence of institutions, but also on the level of institutional development. Norway and Nigeria both created policy and regulatory systems. Norway’s more competent administrative structures grew into a self-regulatory system but, by contrast, Nigeria’s indigenous civil service never developed institutional arrangements sufficient to integrate the oil industry into the entire national or regional institutional framework. Considering these historical and contextual differences between Nigeria and Norway, this article employs ‘stakeholder analysis’ to construct a framework of ‘thinking’ regarding how the oil sector could be effectively governed in Nigeria (Figure 7), a country with a robust civil society but a complex political system: in such countries, evolution of what I call a ‘self-reinforcing system of institutional incompatibility’ is inevitable, but institutionalization of foreign models such as EITI is often difficult to achieve.