An empirical analysis of natural resource rent, bureaucratic control and sustainable development in Nigeria

Abstract

This research addresses how bureaucratic control as well as the rent from natural resources influence Nigeria's sustainable development between 1990 and 2023. The study uses the method known as Autoregressive Distributed Lag (ARDL to control for trade openness, capital formation, and foreign direct investment while analyzing the long-term and short-term relationships between natural resource rent, institutional quality (as determined by bureaucratic control), and sustainable development. The findings show that, both in the short and long term, natural resource rent significantly promotes sustainable development. Additionally, bureaucratic control improves development results, highlighting the significance of institutional effectiveness in resource management. Furthermore, there is a strong positive correlation between resource rent and bureaucratic control, indicating that better bureaucracy amplifies the advantages of resource riches for growth. Additional factors that promote sustainable growth include openness to trade, gross formation of capital, as well as foreign direct investment. A long-term equilibrium that is stable is confirmed by the error correction term. The model's stability and robustness are confirmed by diagnostic testing. The results highlight how important it is to have efficient governance in order to convert the riches of natural resources into sustainable growth. For Nigeria to grow in a way that is inclusive, long-term, and ecologically sustainable, policy initiatives should concentrate on enhancing bureaucratic effectiveness, encouraging good governance, and directing resource income into profitable ventures.