The Nigerian economy at the end of the twentieth century was poor, with a fairly small industrial base, despite the fact that Nigeria's rulers apparently channeled billions of the country's oil dollars toward industrial development. What happened? The following discussion of the Nigerian political economy emphasizes the negative role of a neopatrimonial state. Whatever the changes in regime and leadership, the Nigerian state repeatedly failed to facilitate economic transformation. While professing a commitment to development, state elites focused their energies instead on maintaining power and on privatizing public resources for personal gain or gain by ethnic communities. Why Nigeria ended up with a neopatrimonial state is best understood by noting what did not happen in Nigeria: A public realm failed to emerge. Under such circumstances – with a façade of a modern state but without the normative and organizational underpinnings of such a state – the defining tendencies of the society, namely, personalism and communalism, came to characterize the state as well, weakening the prospects for effective state intervention. The origins of such a state in the colonial period are analyzed in Chapter 8 and the failed attempts of the state to promote industrialization are discussed in Chapter 9.