The State, Institutions, and Policy Support for Clusters

This chapter discusses the particular role of the state and its agencies and other institutions in leveraging industrial clusters as means of employment and poverty eradication in existing literature. It specifically focuses on the past and current roles of government, its agencies, policies, and institutions in poverty eradication in Nigeria, and how these have impacted industrial clusters and Otigba. It showed that positive political institutions have, for the most part, been conspicuous by their absence; when they manifest, their impact on the vulnerable has been seen to be negative. Second, it shows that failed political institutions have spawned diverse governing social institutions and networks that organize human relationships along ethnic and professional lines in order to assist firms and workers to attain benefits related to social security, health, and education, ordinarily available through formal social protection. Third, the chapter reveals clearly the pervasiveness of informal institutions that emerged to fill the vacuum left by weak, absent, or unenforced formal institutions (embodied by state agencies and enforcement rules) and highlights the role of government in creating a conducive environment for firms and workers in clusters through the provision of adequate infrastructure and institutions.