Beyond Macroeconomic Orthodoxy: Designing Institutional Coordination for Inclusive Growth in Nigeria

Abstract

Recent macroeconomic reforms undertaken in Nigeria, such as the withdrawal of petroleum subsidies, which are projected to save over 11 trillion naira by the end of 2025, and the unification of the exchange rate, demonstrate technical competence but reveal poorly addressed gaps in social impact assessment. Primary macroeconomic stabilisation efforts have coincided with rising poverty levels: approximately 139 million citizens (61 percent of the population) now live in poverty as of 2025, and youth unemployment remains critically high, indicating the stabilisation-inclusion dilemma in development policy. This article introduces embedded inclusivity as a theoretical approach by integrating Polanyi's insights on socially embedded markets with modern institutional economics to address Nigeria's reform challenges and institutional coordination gaps. The embedded inclusivity theories contrast with compensatory approaches that assume social protection as additive processes, meaning that distributive considerations are endogenous to policy
design, which gives rise to frameworks of institutional coordination that produce broad-based benefits, specifically market mechanisms. Important implications indicate that sustainable change requires shifting from narrow technocratic approaches to inclusive institutional frameworks that embed social concerns endogenously within economic policy design.