State Intervention/Bailout and Economic Stabilisation in Nigeria: Some Lessons from the United States

Abstract

The study examined the nature of state intervention during economic and/or financial crisis, focusing on Nigeria and US. These two nations have embarked on various kinds of bailouts to stabilize their economies and move their nations on the path of economic recovery and growth. However, the bailout effort is more successful in the US than Nigeria. This is largely due to the approach adopted in these countries. Thus, the main objective of this paper is to ascertain the extent to which government invention has helped stabilize the Nigerian economy, when compared with the experience of the United States. The study revealed that in the US every state intervention/ bailout is approved by congress through legislation, therefore well-guided in its administration or execution, with specific time lines. On the other hand, in Nigeria bailouts are by “executive fiat”, as a result they suffer from poor execution. Hence, the paper concluded that state intervention/bailout in Nigeria has not been very successful because of the approach adopted by the government. The study recommended that subsequently, every bailout from the Nigerian government should be a product of an Act of Parliament, bailout schemes should have specific tools for measuring performance and be guided by specific lines, among others.