In the last two decades, few economists have shaped the global conversation on development as much as Daron Acemoglu, Simon Johnson, and James A. Robinson, the 2024 Nobel Laureates in Economics. With works like “The Colonial Origins of Comparative Development,” “Why Nations Fail,” “The Narrow Corridor,” and “Reversal of Fortune,” their scholarship focuses on the idea that institutions—not culture, geography, or resources—determine the economic success or failure of nations. And when it comes to Africa, particularly Nigeria, these theories are at the centre of some of the most important conversations about the continent’s past, present, and future.
Colonial Legacies and Institutional Drag
In their landmark 2001 paper, “The Colonial Origins of Comparative Development,” Acemoglu, Johnson, and Robinson make a critical distinction between two types of colonial institutions: settler colonies and extractive colonies. The former, established by European settlers for the long term, brought with them stronger property rights and governance structures. The latter, such as Nigeria, were created solely for resource extraction. The economic consequences of this division, they argue, persist today.
Nigeria is the epitome of an extractive colony. British colonial rule focused on exploiting the region’s rich agricultural and mineral resources—palm oil, groundnuts, tin, and coal—while investing little in local institutions or infrastructure. This left Nigeria with a weak governance system that continues to plague the country. Corruption, elite capture, and economic stagnation, they suggest, can be traced back to these colonial-era extractive institutions.
But is this all there is to Nigeria’s story?
Debating the Dominance of Institutions
Many scholars agree that institutions matter, but there’s growing debate about whether Acemoglu, Johnson, and Robinson’s institutional argument oversimplifies the complex historical and economic realities in Africa.
Economist Jeffrey Sachs has argued that geographic factors—like the prevalence of tropical diseases and landlocked geographies—play a critical role in economic underdevelopment. Sachs criticizes Acemoglu and his colleagues for underestimating these forces in shaping Africa’s fate. Moreover, development economist Jared Diamond points to ecology and geography as inextricable factors in the region’s economic struggles.
Others, like Pranab Bardhan, argue that post-colonial governance decisions have played a bigger role than the colonial legacy itself. South Korea, for example, also had a legacy of extractive colonialism but managed to escape it through decisive governance reforms and external Cold War influences. This leads to the question: why couldn’t Nigeria do the same?
Economic historian Morten Jerven adds another layer of criticism, calling into question the data used by Acemoglu and his co-authors. Jerven argues that the historical GDP figures they rely on to draw broad conclusions about Africa’s colonial and post-colonial economies are often incomplete or inaccurate.
And then there’s Nigerian historian Toyin Falola, who reminds us that Nigeria had complex pre-colonial state formations—like the Kingdom of Benin and the Sokoto Caliphate—that played a significant role in shaping the region’s institutional outcomes. Falola contends that these indigenous systems, though undermined by colonial rule, are part of the broader story of Nigeria’s institutional weaknesses.
The Resource Curse: Nigeria in “Why Nations Fail”
In their widely acclaimed book “Why Nations Fail” (2012), Acemoglu and Robinson move from the colonial past to the present, advancing the idea that inclusive institutions—those that provide broad-based opportunities and promote the rule of law—are essential for economic prosperity. Nigeria, they argue, is an unfortunate example of a country trapped by extractive institutions, where political elites capture resources for their benefit at the expense of the broader population.
They highlight Nigeria’s oil wealth as a classic case of the “resource curse.” Since oil was discovered in commercial quantities in the 1950s, it has become both the blessing and the bane of Nigeria’s political economy. Elites have used oil wealth to entrench their power, undermining democratic governance, fostering corruption, and exacerbating inequality. Military coups, civil wars—like the Biafran War—and authoritarian regimes are symptoms of a deeper institutional malaise.
Here again, critics have raised important counterpoints.
Development economist William Easterly contends that Acemoglu and Robinson’s work downplays the importance of policy reforms and individual agency. Easterly points to sectors like telecommunications and banking in Nigeria, where reforms have spurred pockets of growth despite institutional weaknesses.
Ha-Joon Chang, another leading economist, argues that “Why Nations Fail” adopts a Eurocentric lens. He highlights how countries like China have thrived despite having what Acemoglu and Robinson might call extractive political institutions. According to Chang, Nigeria could similarly find success with reforms that work within its unique context.
And then there’s Joel Mokyr, who believes Acemoglu and Robinson give too much weight to political institutions. Mokyr points to the importance of innovation and human capital development—two areas that could offer a path out of the resource curse for countries like Nigeria.
Nigeria in “The Narrow Corridor”
In their 2019 book “The Narrow Corridor,” Acemoglu and Robinson argue that liberty and prosperity can only be achieved when a strong state coexists with an empowered civil society. Nigeria, they claim, remains far from this “narrow corridor” because its weak state institutions fail to provide basic public goods or curb corruption, while civil society lacks the power to hold the government accountable.
In theory, civil society should be able to push the state into becoming more inclusive. But in Nigeria, they suggest, elites have co-opted or suppressed civil society to maintain their grip on power. Even significant popular mobilizations, like the 2012 protests against the removal of fuel subsidies, have struggled to produce lasting change.
Yet critics of “The Narrow Corridor” question whether this framework adequately captures non-Western contexts. Michael Mann, a sociologist, argues that the balance between state and society in African countries is often mediated by informal governance structures—like ethnic groups and traditional leaders—that Acemoglu and Robinson overlook.
Anthropologist James Ferguson adds that Nigeria’s state capacity is not only weak, but also undermined by external actors—including multinational oil companies that wield immense power in the Niger Delta region. According to Ferguson, external forces, not just internal governance failures, make it harder for Nigeria to move into the “narrow corridor.”
And yet, despite these challenges, some scholars like political scientist Larry Diamond see reasons for hope. Recent electoral reforms and movements like the #EndSARS protests suggest that Nigerian civil society is gaining strength, offering a potential path toward greater accountability and reform.
Reversals of Fortune: Institutions Over Geography
In “Reversal of Fortune” (2002), Acemoglu, Johnson, and Robinson challenge the notion that geography is destiny. They argue that once-prosperous regions like West Africa, including Nigeria, were undermined by the imposition of extractive colonial institutions. It was not geography, but the legacy of these institutions, they argue, that caused economic stagnation.
Here, they challenge long-held geographical determinism, particularly the arguments of scholars like David Landes, who argue that culture and geography are the real drivers of economic success. And while Nathan Nunn broadly agrees with the institutional hypothesis, he suggests that the slave trade—which devastated West Africa for centuries—played an equally crucial role in weakening African institutions, making them more susceptible to extractive colonialism.
But cultural historians have pointed out that Africa’s pre-colonial societies were far from primal or doomed. They had complex trade networks, political systems, and cultural practices that were capable of innovation and growth—until they were disrupted by both the slave trade and European imperialism.
The Institutional Road Ahead
Acemoglu, Johnson, and Robinson’s works have reshaped how we think about Nigeria and other African countries. The enduring legacy of colonialism and the persistence of extractive institutions have been critical to understanding why some nations fail to develop. However, as the critics make clear, institutions alone cannot tell the whole story. Geography, policy reform, innovation, and individual agency all play significant roles in shaping the trajectory of nations.
Nigeria remains a case study in the ongoing struggle to overcome its institutional past. But with recent movements toward greater accountability, coupled with ongoing debates about the future of governance and reform, the country may yet find a path toward inclusive development.
Colonialism and Nigeria’s Economic Development: Insights from 2024 Nobel Laureates in Economics (Acemoglu, Johnson, and Robinson)
The Institutional Economists-Daron Acemoglu, Simon Johnson, and James A. Robinson- Who Won the 2024 Nobel Prize in Economics Have Illuminated their Analysis with Nigeria's Trajectory
In the last two decades, few economists have shaped the global conversation on development as much as Daron Acemoglu, Simon Johnson, and James A. Robinson, the 2024 Nobel Laureates in Economics. With works like “The Colonial Origins of Comparative Development,” “Why Nations Fail,” “The Narrow Corridor,” and “Reversal of Fortune,” their scholarship focuses on the idea that institutions—not culture, geography, or resources—determine the economic success or failure of nations. And when it comes to Africa, particularly Nigeria, these theories are at the centre of some of the most important conversations about the continent’s past, present, and future.
Colonial Legacies and Institutional Drag
In their landmark 2001 paper, “The Colonial Origins of Comparative Development,” Acemoglu, Johnson, and Robinson make a critical distinction between two types of colonial institutions: settler colonies and extractive colonies. The former, established by European settlers for the long term, brought with them stronger property rights and governance structures. The latter, such as Nigeria, were created solely for resource extraction. The economic consequences of this division, they argue, persist today.
Nigeria is the epitome of an extractive colony. British colonial rule focused on exploiting the region’s rich agricultural and mineral resources—palm oil, groundnuts, tin, and coal—while investing little in local institutions or infrastructure. This left Nigeria with a weak governance system that continues to plague the country. Corruption, elite capture, and economic stagnation, they suggest, can be traced back to these colonial-era extractive institutions.
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But is this all there is to Nigeria’s story?
Debating the Dominance of Institutions
Many scholars agree that institutions matter, but there’s growing debate about whether Acemoglu, Johnson, and Robinson’s institutional argument oversimplifies the complex historical and economic realities in Africa.
Economist Jeffrey Sachs has argued that geographic factors—like the prevalence of tropical diseases and landlocked geographies—play a critical role in economic underdevelopment. Sachs criticizes Acemoglu and his colleagues for underestimating these forces in shaping Africa’s fate. Moreover, development economist Jared Diamond points to ecology and geography as inextricable factors in the region’s economic struggles.
Others, like Pranab Bardhan, argue that post-colonial governance decisions have played a bigger role than the colonial legacy itself. South Korea, for example, also had a legacy of extractive colonialism but managed to escape it through decisive governance reforms and external Cold War influences. This leads to the question: why couldn’t Nigeria do the same?
Economic historian Morten Jerven adds another layer of criticism, calling into question the data used by Acemoglu and his co-authors. Jerven argues that the historical GDP figures they rely on to draw broad conclusions about Africa’s colonial and post-colonial economies are often incomplete or inaccurate.
And then there’s Nigerian historian Toyin Falola, who reminds us that Nigeria had complex pre-colonial state formations—like the Kingdom of Benin and the Sokoto Caliphate—that played a significant role in shaping the region’s institutional outcomes. Falola contends that these indigenous systems, though undermined by colonial rule, are part of the broader story of Nigeria’s institutional weaknesses.
The Resource Curse: Nigeria in “Why Nations Fail”
In their widely acclaimed book “Why Nations Fail” (2012), Acemoglu and Robinson move from the colonial past to the present, advancing the idea that inclusive institutions—those that provide broad-based opportunities and promote the rule of law—are essential for economic prosperity. Nigeria, they argue, is an unfortunate example of a country trapped by extractive institutions, where political elites capture resources for their benefit at the expense of the broader population.
They highlight Nigeria’s oil wealth as a classic case of the “resource curse.” Since oil was discovered in commercial quantities in the 1950s, it has become both the blessing and the bane of Nigeria’s political economy. Elites have used oil wealth to entrench their power, undermining democratic governance, fostering corruption, and exacerbating inequality. Military coups, civil wars—like the Biafran War—and authoritarian regimes are symptoms of a deeper institutional malaise.
Here again, critics have raised important counterpoints.
Development economist William Easterly contends that Acemoglu and Robinson’s work downplays the importance of policy reforms and individual agency. Easterly points to sectors like telecommunications and banking in Nigeria, where reforms have spurred pockets of growth despite institutional weaknesses.
Ha-Joon Chang, another leading economist, argues that “Why Nations Fail” adopts a Eurocentric lens. He highlights how countries like China have thrived despite having what Acemoglu and Robinson might call extractive political institutions. According to Chang, Nigeria could similarly find success with reforms that work within its unique context.
And then there’s Joel Mokyr, who believes Acemoglu and Robinson give too much weight to political institutions. Mokyr points to the importance of innovation and human capital development—two areas that could offer a path out of the resource curse for countries like Nigeria.
Nigeria in “The Narrow Corridor”
In their 2019 book “The Narrow Corridor,” Acemoglu and Robinson argue that liberty and prosperity can only be achieved when a strong state coexists with an empowered civil society. Nigeria, they claim, remains far from this “narrow corridor” because its weak state institutions fail to provide basic public goods or curb corruption, while civil society lacks the power to hold the government accountable.
In theory, civil society should be able to push the state into becoming more inclusive. But in Nigeria, they suggest, elites have co-opted or suppressed civil society to maintain their grip on power. Even significant popular mobilizations, like the 2012 protests against the removal of fuel subsidies, have struggled to produce lasting change.
Yet critics of “The Narrow Corridor” question whether this framework adequately captures non-Western contexts. Michael Mann, a sociologist, argues that the balance between state and society in African countries is often mediated by informal governance structures—like ethnic groups and traditional leaders—that Acemoglu and Robinson overlook.
Anthropologist James Ferguson adds that Nigeria’s state capacity is not only weak, but also undermined by external actors—including multinational oil companies that wield immense power in the Niger Delta region. According to Ferguson, external forces, not just internal governance failures, make it harder for Nigeria to move into the “narrow corridor.”
And yet, despite these challenges, some scholars like political scientist Larry Diamond see reasons for hope. Recent electoral reforms and movements like the #EndSARS protests suggest that Nigerian civil society is gaining strength, offering a potential path toward greater accountability and reform.
Reversals of Fortune: Institutions Over Geography
In “Reversal of Fortune” (2002), Acemoglu, Johnson, and Robinson challenge the notion that geography is destiny. They argue that once-prosperous regions like West Africa, including Nigeria, were undermined by the imposition of extractive colonial institutions. It was not geography, but the legacy of these institutions, they argue, that caused economic stagnation.
Here, they challenge long-held geographical determinism, particularly the arguments of scholars like David Landes, who argue that culture and geography are the real drivers of economic success. And while Nathan Nunn broadly agrees with the institutional hypothesis, he suggests that the slave trade—which devastated West Africa for centuries—played an equally crucial role in weakening African institutions, making them more susceptible to extractive colonialism.
But cultural historians have pointed out that Africa’s pre-colonial societies were far from primal or doomed. They had complex trade networks, political systems, and cultural practices that were capable of innovation and growth—until they were disrupted by both the slave trade and European imperialism.
The Institutional Road Ahead
Acemoglu, Johnson, and Robinson’s works have reshaped how we think about Nigeria and other African countries. The enduring legacy of colonialism and the persistence of extractive institutions have been critical to understanding why some nations fail to develop. However, as the critics make clear, institutions alone cannot tell the whole story. Geography, policy reform, innovation, and individual agency all play significant roles in shaping the trajectory of nations.
Nigeria remains a case study in the ongoing struggle to overcome its institutional past. But with recent movements toward greater accountability, coupled with ongoing debates about the future of governance and reform, the country may yet find a path toward inclusive development.
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