The Effect of Market Association Political Power and Local Government Effectiveness on Trade: Evidence from Nigeria

Research Note
Published on 25 July 2014


This project examines how the political power of market associations and local government effectiveness affect contractual trade and extortion in Lagos. Contrary to earlier research findings, the project concludes that without a check on their power, strong markets associations extort traders, and traders in such markets are less likely to obtain products on credit from their suppliers. These effects are mitigated when there is a balance of power between the market and local government, challenging the assertions that either impartial public institutions or strong private associations are necessary for market order.