Theory of Firm and Market Organization: Fundamentals of Welfare Economics

This study examines the interrelationship between firm behavior, market structure, and welfare outcomes, drawing on comparative evidence from global, African, and Nigerian contexts. By integrating the fundamentals of welfare economics, the research evaluates how efficiently market outcomes translate into equitable growth, poverty reduction, and human development. The study employs a descriptive and analytical design, using secondary data from the World Bank, IMF, UNDP, UNCTAD, OECD, and Nigeria’s National Bureau of Statistics (NBS) covering the period 2015–2024. Quantitative indicators such as the Herfindahl–Hirschman Index (HHI), GDP growth rate, Human Development Index (HDI), Gini coefficient, and poverty headcount ratio are analyzed using descriptive statistics, correlation techniques, and graphical comparisons. Results reveal a strong inverse relationship between market concentration and welfare performance, with higher concentration levels corresponding to lower welfare indicators. Globally, economies with competitive market structures exhibit higher productivity, innovation, and inclusive growth. Across Africa, structural bottlenecks such as infrastructural deficits, policy instability, and weak competition laws hinder efficiency. For Nigeria, findings show a high market concentration index (0.46) alongside a relatively low HDI (0.55) and elevated poverty rate (41.1%), implying that oligopolistic dominance and weak regulatory enforcement constrain welfare outcomes. The study concludes that enhancing welfare in Nigeria requires reforms that deepen market competition, promote small and medium enterprises (SMEs), strengthen institutional quality, and improve regulatory frameworks. It recommends policy measures that foster innovation, transparency, and inclusiveness to ensure that firm behavior aligns with societal welfare objectives.