Nigeria, July 30 -- In my last two articles, I argue that Nigeria's developmental challenge is less about the absence of ideas than the organisation of incentives. The first article contends that many of our governance failures are symptoms of a deeper organisational misalignment between authority, incentives and capability. The second traces the evolution of Nigeria's fiscal federalism, showing how the gradual shift from rewarding production towards prioritising distribution weakened the incentive for governments to expand their productive base.

The third in the series has been divided into two parts: the first (the present one) continues on the incentive argument and lays the ingredients for productive rivalry among states, while the s...