The Economics of Public Administration in Nigeria: Institutional Bottlenecks, Fiscal Resource Allocation, and Growth Trajectories

Abstract

This paper examines the economics of public administration in Nigeria, with particular emphasis on institutional bottlenecks, fiscal resource allocation, bureaucratic efficiency, and their implications for economic growth. The analysis is anchored on Public Choice Theory, New Institutional Economics, and New Public Management, which collectively provide insights into rent-seeking behaviour, transaction costs, bureaucratic incentives, institutional quality, and performance-oriented public-sector management. The paper argues that the effectiveness of public administration depends not only on the volume of fiscal resources available but also on the institutional mechanisms governing their allocation, implementation, monitoring, and accountability. Key challenges identified include the high cost of governance, excessive recurrent expenditure, weak fiscal federalism, inefficient public procurement, overlapping government agencies, administrative delays, and inadequate performance accountability. These institutional constraints contribute to fiscal deficits, rising public debt, reduced infrastructure investment, weak private-sector incentives, and lower economy-wide productivity. The paper recommends the structural rationalization of government agencies, strengthened fiscal responsibility, performance-based budgeting, digitalization of public administration, improved public procurement systems, and stronger incentives for sub-national governments to enhance internally generated revenue. It concludes that improving the economic efficiency of public administration is essential for enhancing public-sector productivity, promoting fiscal sustainability, stimulating investment, and supporting Nigeria’s long-term economic growth trajectory.