Why is transparency not enough to address the institutions curse? A case study of Nigeria’s implementation of the EITI

Master Thesis


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A country’s institutional context determines how resource rents are managed. Where institutions are weak and resource rents are not productively managed, this is referred to as the institutions curse to emphasize the intermediate relationship between natural resources and underdevelopment via institutional quality. The international community brought forward transparency and accountability through Transparency and Accountability Initiatives as potential solutions to underdevelopment in natural resource rich countries. This paper explores whether the EITI, a transparency and accountability initiative, is enough to ameliorate the institutions curse. It relies on Kolstad and Wiig’s (2009a) theory on impartiality enhancing institutions and argues that sanctioning those who benefit from opaque transparency is important to ameliorate the institutions curse. Furthermore, that an independent civil society, that represents vulnerable host communities, must be supported in an effort to counter-balance the power that is mostly skewed to Trans National Oil Companies (TNOCs) and governments. Through a case study approach that focuses on Nigeria, this paper finds that the lack of enforcement and the lack of civil society independence and participation in the Nigerian EITI’s Multi-Stakeholder Initiative (MSI) are the major constraints that hinder the Nigerian Extractive Transparency Initiative (NEITI) success in achieving accountability. In addition, due to the persistent nature of institutions, the EITI and its focus on revenue transparency, is not enough to address the institutions curse. This paper thus recommends a global human rights approach that will connect the struggles of locals to international struggles in the form of a binding treaty alliance. A binding treaty alliance will ensure that TNOCs are held accountable and that there will be positive spillovers in countries that have weak institutions.