INSTITUTIONAL QUALITY AND ECONOMIC GROWTH IN NIGERIA
Joel Ayenajeyi Elisha, Ilemona Adofu and Ibrahim Aishatu Ogiri
Volume 4 Issue 1
Abstract
The study examined the effect of institutional quality on economic growth in Nigeria. The study used annual time series data covering the period of 1996 to 2022; the data for the variables were checked against the problems of unit root using Augmented Dickey Fuller (ADF) and Phillips Perron (PP) unit root test and all the variables were either stable or integrated at I(0) and I(1). Institutional quality was proxied on government effectiveness, rule of law, control of corruption, regulatory quality, and control of corruption, voice and accountability while real gross domestic product was used as proxy for economic growth. Consequently, the ADF bound test was employed and it revealed the existence of long-run relationship between the dependent and independent variables. The AutoRegressive Distributed Lag (ARDL) model was adopted for the study, and it was discovered that control of corruption, voice and accountability, political stability, and rule of law were statistically insignificant while government effectiveness and regulatory quality were statistically significant. The overall finding revealed that institutional quality has positive but insignificant effect on economic growth in Nigeria. The study therefore recommends that; vigorous anti-corruption campaign should be taken very seriously by EFCC and ICPC; the agencies should be constituted by reputable staff to bring forth desired results. Also, the national assembly members (both lower and upper chamber) should prioritize high and improved laws such as; life imprisonment or death sentence for political and public office holders found with corruption charges. Key words: Institutional Quality, Economic Growth, Auto-Regressive Distributed Lag, and Development
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