Natural resource booms and Third World development: Assessing the subsectoral impacts of the Nigerian petroleum boom on agricultural export performanc

Most developing countries are heavily reliant upon agricultural exports as the primary generator of economic growth. However, for a smaller subset of countries natural resource booms can act as catalysts for more rapid structural economic transformation. Originally cast as beneficial phenomena because of their ability to ease capital and other constraints to development, more recent empirical evidence suggests that booming sectors can actually have severe detrimental repercussions on the non-booming tradeable sectors of an economy. Cast in the framework of the theory of the Dutch Disease, this study focuses on the effects of the Nigerian oil boom of the early 1960s on the performance of the agricultural export sector.;Employing the expansion method, a mathematical routine which allows for the empirical investigation of parametric drift in models as contextual variations are introduced, linear and quadratic expansion model formulations are developed to assess the relative complexity of booming-non-booming sector interactions. Specific attention is given to the extent to which the growth rates of Nigerian agricultural exports have changed over time as: (a) the volume of oil exports, and (b) the growth rate of oil exports are allowed to vary over a set of hypothetical values which reflect Nigerian oil boom realities. The agricultural export subsector is disaggregated by mode of production in order to determine if the oil boom has had differential impacts on capital intensive, labor intensive (both subsidized and non-subsidized), and non-cultivated tree crop exports.;Four important conclusions emerge: (a) the quadratic expansion model most accurately captures Nigerian oil-agricultural export interactions; (b) heavily capital-dependent agricultural exports are most clearly influenced by the oil boom; (c) the growth rate of capital-intensive agricultural exports are initially stimulated, and later stagnated by the oil boom, while the growth rate of subsidized labor intensive agricultural exports are first stagnated and then stimulated by the oil boom; and (d) the expansion method provides a useful alternative means of exploring theoretical and applied issues related to the Dutch Disease paradigm. The implications of the findings for agricultural and petroleum policy in Nigeria are assessed, and a research agenda for further booming-non-booming sector investigations is proposed.