Fiscal Federalism and Oil Resource Management Conflicts: A Comparative Study of the United States of America and Nigeria

This study offers a comparative analysis of fiscal federalism and oil resource management conflicts in the United States and Nigeria- two multicultural federations with shared histories of constitutional development but divergent outcomes in natural resource governance. While both countries operate under federal systems, the United States exhibits a decentralized fiscal structure that allows subnational governments significant autonomy over resource control, as exemplified by states like Texas and Alaska. In contrast, Nigeria’s highly centralized fiscal federalism has led to tensions and inefficiencies, particularly in the oil-producing Niger Delta region. Guided by the theoretical framework of fiscal federalism as articulated by Kenneth Arrow, Richard Musgrave, and Paul Samuelson, this research employs a qualitative design and relies on secondary data sources. The analysis reveals that the centralized control of oil resources in Nigeria undermines local development, stokes regional grievances, and contributes to resource-related conflicts. In contrast, the U.S. model facilitates local accountability and more responsive governance. The study recommends a restructuring of Nigeria’s fiscal federalism to devolve greater control and benefits to oil-producing states, promoting more equitable and effective resource management. This comparative study underscores the importance of aligning constitutional frameworks with local needs and democratic principles to enhance stability and sustainable development.