Accounting for Divergences in Industrial Policy Performance in the Cement and Textile Industries in Nigeria

Abstract

The performance of industrial policies in Nigeria’s cement and textile industries has shown puzzling divergence. While the Backward Integration Policy (BIP) transitioned Nigeria from a net cement importer to a self-sufficient producer, the textile industrial policies have failed to revive the ailing Nigerian textile industry. To understand this divergence in policy outcomes, this paper combines political settlement (PS) analysis with technological capability (TC) theory and the concept of rents space (RS). It finds that while political leadership support is vital for policy performance, differing industrial policy outcomes between the case-study industries are attributable to differences in: (i) the requirements, adoption, and implementation of learning, capabilities, and routines in particular industries, (ii) the relative capabilities of entrepreneurs, and (iii) the relative importance of respective industry entrepreneurs to ruling elites for political financing. Apart from contributing to the scant literature exploring the puzzle of divergent policy outcomes among sectors of the same economy, the paper also contributes to theory by applying a dimension of Khan’s original PS theory that existing literature underemphasises—that is, the dimension on how the relative power and capabilities of productive entrepreneurs in particular sectors affect the performance of policy institutions.