Policies·nigeria_sfem_exchange_rate_1986

Nigeria Sfem Exchange Rate 1986

NGA·1986 – 1993candidate

movestrade openness↑product market competition↑monetary expansion direction↑sectoral subsidy↓

What the policy did

The Second-Tier Foreign Exchange Market (SFEM), launched on 26 September 1986, replaced Nigeria's fixed administrative Naira-pricing regime with auction-determined exchange rates for non-oil transactions. SFEM produced an immediate sharp Naira depreciation, restored relative price signals for tradables, and was later merged into a unified Foreign Exchange Market (FEM) — a centrepiece reform of the SAP that shifted resource allocation away from import-license rents.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended

↑

trade openness

regulatory.trade_openness

Trade policy openness — tariffs, non-tariff barriers, FTAs, industrial protection.

increased · weak

more open trade

Auction-based FX allocation ended import-license rationing and made foreign exchange available to non-privileged importers.

↑

product market competition

regulatory.product_market_competition

Product-market regulation, entry barriers, licensing burdens, network-industry regulation, price controls.

increased · weak

more competition-friendly (lower entry barriers)

Eliminated the rent-seeking advantage that politically connected importers had under the prior fixed regime.

↑

monetary expansion direction

monetary.monetary_expansion_direction

Direction of monetary-base expansion decisions relative to trend. Separate from fiscal.transfer_expansion even when correlated.

increased · weak

expansionary (balance sheet, rates lower than Taylor)

Naira depreciation revalued FX reserves and enlarged Naira monetary aggregates through the banking system.

↓

sectoral subsidy

fiscal.sectoral_subsidy

Targeted industrial and sectoral subsidies (renewable energy, chip manufacturing, agriculture, green hydrogen, etc).

decreased · weak

reduced sectoral subsidies

Removed implicit FX subsidies embedded in below-market dollar allocations to favoured importers.

Enacted by

nigeria_buhari_sap_structural_adjustment_1986

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Estonia adopted among the most radical market-liberalisation packages of any post-Soviet state — flat tax (26% universal rate, 1994), currency board (EEK pegged to DM/EUR, 1992), rapid privatisation, unilateral free trade, and minimal capital controls — and by 2007 had recovered to Soviet-era GDP per capita levels and substantially exceeded them, while Belarusian and Ukrainian peers had not recovered comparably.

estonia_market_reform_post_soviet_growth_1991_2007inferred

viaregulatory.trade_opennessregulatory.product_market_competition

PARTIAL — recovery threshold pass=True (year_recovered=1998, 2007 vs 1991 = 70.53282727739165); Baltic−CIS gap pass=False (gap=5.1509956229348575)

partial

The Soviet central-planning system, having already exhibited TFP stagnation 1970-1989, underwent a canonical institutional and economic collapse 1989-1998 as plan-enforcement was withdrawn without functioning market institutions in place.

soviet_union_central_planning_gdp_collapse_1989_1991inferred

viaregulatory.product_market_competitionmonetary.monetary_expansion_direction

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['derived: count of canonical_metrics with threshold met']

run pending

Across a broad panel of economies 1980-2020, market reforms (privatisation, trade liberalisation, and price decontrol) produce durable gains in real GDP per capita growth only when rule-of-law scores exceed a minimum threshold (WGI Rule of Law > -0.5, approximately the 40th percentile of the global distribution).

rule_of_law_market_reform_complementarityinferred

viaregulatory.product_market_competitionregulatory.trade_openness

REFUTED — coef=-0.1483 (sign opposite claim +), p=0.00481

refuted

In a panel of middle-income countries 1990-2020, export complexity (Hausmann-Hidalgo Economic Complexity Index) rises more following reforms that improve foreign market access and reduce domestic entry barriers than following expansions of subsidy-only industrial policy.

export_complexity_market_access_vs_subsidyinferred

viaregulatory.trade_opennessfiscal.sectoral_subsidyregulatory.product_market_competition

PARTIAL — coef=+4.68e-14, p=0.393; effect magnitude effectively zero

partial

Canada’s long-run prosperity after the Canada–US Free Trade Agreement (1988) and NAFTA (1994) is more associated with market openness than with national industrial-policy initiatives.

canada_market_liberalisation_vs_state_industry_1988_2024inferred

viaregulatory.trade_opennessregulatory.product_market_competitionfiscal.sectoral_subsidy

INCONCLUSIVE_DATA_PENDING — treatment 'canada_post_1988' has no within-country variation under country fixed effects

run pending

Peru's 1990-1995 Fujimori shock-therapy package (price liberalisation, fiscal stabilisation under the August 1990 "Fujishock", Brady-style external debt restructuring 1996-1997, large-scale privatisation of SOEs, central-bank independence under the 1993 constitution, and trade liberalisation) produced a structural break in inflation and real-GDP per capita relative to Peru's 1985-1990 hyperinflation trajectory and relative to a Latin American peer pool that did not adopt comparable packages on the same timeline.

peru_fujimori_shock_therapy_1990_2000inferred

viaregulatory.product_market_competitionmonetary.monetary_expansion_directionregulatory.trade_openness

PARTIAL — mean_gap=-0.7927, |gap|/pre_sd=7.8, p_perm=0.4; claim direction ambiguous

partial

Among high-income economies 1990-2020, services-sector competition — measured by low barriers to entry, low incumbent-protection scores, and high churn in retail, transport, communications, and professional services — predicts long-run prosperity (real GDP per capita growth and labour-productivity growth) better than manufacturing-specific industrial policy spending.

sectoral_competition_services_productivityinferred

viaregulatory.product_market_competitionregulatory.trade_opennessfiscal.sectoral_subsidy

PARTIAL — coef=+0.000842, p=0.361 (above α=0.05); direction inconclusive

partial

Consumer product variety and price-adjusted welfare improve more after episodes of trade liberalisation and competition-policy reform than after state industrial-policy episodes of comparable duration and scale, in a panel of middle- and high-income countries 1980-2020.

consumer_choice_variety_trade_market_reforminferred

viaregulatory.trade_opennessfiscal.sectoral_subsidyregulatory.product_market_competition

INCONCLUSIVE_DATA_PENDING — treatment 'competition_reform_episode' has no within-country variation under country fixed effects

run pending

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

New Economic Policy — Decree 21060 (Bolivia stabilisation 1985)

BOL·1985

match

2.1

trade opennessproduct market competitionsectoral subsidy

Czechoslovak price liberalisation 1991

CSK·1991

match

2.1

product market competitiontrade opennesssectoral subsidy

Rogernomics — New Zealand market reforms 1984-1990

NZL·1984