Impact of Institutional Framework on Economic Growth of Nigeria (1996 to 2022 (original) (raw)

Institutional Quality and Economic Growth: Evidence from Nigeria

2020

This study ascertained the directional effect of institutional quality through contract intensive money and effective governance index to economic growth in Nigeria using annual time series data covering the period 1979 to 2018. The study hinges on both the Solow-Swan neoclassical growth model and Washington Consensus to provide insight on the policy necessity for institutional quality. To achieve this, the study employs both the Johansen Cointegration and Ordinary Least Square (OLS) approach. The estimated cointegration test reveals joint relationship among the variables. OLS model shows that economic growth responds positively to institutional quality (contract intensive money) and is statistically significant while effective governance index exert positive and insignificant influence on the economy. The empirical results further reveal that economic growth respond positively and negative to the effect from the variables of domestic investment and foreign direct investment but sig...

The nexus between economic growth, institutional quality, and poverty in Nigeria

Journal of Emerging Economies & Islamic Research, 2023

Poverty, institutional quality, and economic growth are all crucial to a country's development and have garnered attention from scholars and policymakers over the years. This study looked at the relationship between poverty, institutional quality, and economic growth in Nigeria from 1996 to 2018, applying the techniques of Fully Modified OLS (FMOLS) and Causality test. The two institutional quality variables that were used are rule of law and corruption control. Consequently, the study established that an increase in control of corruption (a corruption free environment), GDP growth, government expenditure, and gross capital formation had reducing effects on poverty in the short run. Also, control of corruption had a negative effect on relative poverty, indicating that a corrupt free environment limits the spread of poverty in the country. Hence, it was recommended, amongst others to encourage people to do the right thing and prioritise basic human values such as honesty and integrity. Therefore, the government is advised to embark on mind orientation, especially in primary and secondary school, in order to build the future of the nation from the ground. Also, the administration and implementation of the rule of law and the judicial system of the nation should be revisited with the intention of causing them ( the law, the judicial system, and the institution governing the land) to favor the rights and good of the people.

CAUSALITY BETWEEN INSTITUTIONAL QUALITY AND ECONOMIC GROWTH: EVIDENCE FROM SUB-SAHARAN AFRICA

This paper analyses the causal relationship between institutional quality and economic growth to investigate whether institutional quality is the outcome or the cause of economic growth in Sub-Saharan Africa. It uses annual panel data of 27 countries for the period spanning 1996 to 2014 by employing Pedroni panel co-integration, Wald panel causality, and the system GMM techniques. The co-integration test results show that there is a long-run relationship between institutional quality and economic growth. Also, the causality test results show a unidirectional causality from economic growth to institutional quality but not the other way round. Furthermore, the study found that institutional quality, trade openness, financial development, and debt positively affect economic growth. Also, economic growth and freedom are found to be important determinants of institutional quality. However, debt servicing and dependence on natural resources negatively affect economic growth and institutional quality respectively. It is, therefore, recommended that enhancement of institutional quality, openness, and financial development; while downsizing of debt servicing is crucial in achieving desired level economic growth in the region.

Inclusive Growth Effects of Institutional Quality in Nigeria

This study empirically examined the relationships between institutional quality and inclusive growth as measured by the real GDP per person employed (RGDPE) in Nigeria. An Autoregressive Distributed Lag (ARDL) Bounds testing approach to cointegration was employed using annual secondary time series data from 1998 to 2017. The data were sourced from the Central Bank of Nigeria's statistical Bulletin, National Bureau of Statistics' final Accounts, IMF's International Financial Statistics (IFS) and Worldwide Governance Indicators (WGIs). The study concluded that institutional quality had a significant effect on inclusive growth in Nigeria. It is therefore recommended that institutional improvement beyond the present liberal democratic threshold is much needed to effectively harness the human capital resource base. The Nigerian government should adopt a labour-intensive development strategy such that poor active households are comprehensively integrated into productive activities for optimal value-chain finance-growth inclusiveness. This would address the protracted tripartite socioeconomic problems of poverty, inequality and unemployment in line with Lin's comparative advantage conforming hypothesis. e. This would enhance formulating and implementing employment growth-oriented policies that are compatible with the society's resources endowment and developmental goals.

Institutional quality and economic growth in East African economies

Turkish Economic Review, 2017

Abstract. This study examines the effect of quality of institutions on economic growth in five East African countries using panel data for the period spanning from1996 to 2015. Fixed effects (FE) and random effects (RE) models were employed for estimation. Using Hausman test, FE was earmarked to be more appropriate model for this study. The empirical findings show that the quality of institution significantly impacts on economic growth. Political stability, government effectiveness, rule of law and control of corruption in particular are significant variables. Regulatory quality, voice and accountability indicate insignificant effect on growth. The results suggest that governance that promotes strong institutions is an important condition for economic growth. Particular focus should be focused on enhancing political stability, government effectiveness, rule of law and control of corruption so as to attain economic development. Keywords. Institutional quality, Economic growth, East ...

Institution and Economic Growth performance in Nigeria

The role of institution in promoting economic growth has sparked significant interests in recent years. This study aims to examine the relationship between Institutions measures and economic growth performance of Nigeria. In order to obtain the aforementioned objective, we employed ARDL approach to co-integration and Causality. The findings of this study indicate two -way causal relationship that is economic growth and Institution causes each other. The findings of the study suggest that despite much rhetoric to the contrary good institutions in Nigeria requires resources, which imply that poor institutions is associated with having low income .The policy implication is that for Nigeria to achieved better institutions emphasis must be given to critical growth driven sectors.

Institutional quality and economic growth: evidence from Sub-Saharan Africa countries

African Journal of Economic Review, 2021

This paper employs two step systems GMM to analyse the effect of institutional quality on economic growth for Sub-Saharan African countries for the period from 2006 to 2018. The findings show that an improvement on institutional quality positively and significantly improve Sub-Saharan African countries output. The findings further provide evidence that the effect of institutional quality on output varies with regional location of SSA countries. In particular, institutional qualities are more effective in driving income growth in West African region than the other three regions of Eastern Africa and Central Africa. In addition, the findings indicate that the impact of institutional quality on output growth varies with income level of SSA countries. An improvement in intuitional quality is more likely to improve economic performance of low income SSA economies than the middle income SSA countries. SSA countries should strengthen independent institutional bodies that prosecute economic crimes. Also, African countries should support African agendas that are aligning with global development agenda. Sub-Saharan African countries should strengthen institutions that widen democratic space, civil liberty and the participation of citizen in the development agenda of a country.

Institutional quality and economic growth in Sub-Saharan Africa: a panel data approach

Journal of Economics and Development

PurposeThe main purpose of this study is to examine the impact of different dimensions of institutional quality indices on the economic growth of Sub-Saharan African (SSA) countries.Design/methodology/approachThe study uses a panel data set of 31 SSA countries from 1991 to 2015 and employs a two-step system-GMM (Generalized Method of Moments) estimation technique.FindingsThe study's empirical results indicate that investment-promoting and democratic and regulatory institutions have a significant positive effect on economic growth; however, once these institutions are taken into account, conflict-preventing institutions do not have a significant impact on growth.Practical implicationsThe study's findings suggest that countries in the region should continue their institutional reforms to enhance the region's economic growth. Specifically, institutions promoting investment, democracy and regulatory quality are crucial.Originality/valueUnlike previous studies that either use...

Institutional Quality and Industrial Growth: A Causality Analysis

Asian Journal of Education and Social Studies, 2021

The research study investigates the causal links between institutional quality and industrial output growth in Nigeria for the periods 1996:Q1-2018:Q4. Institutional quality was delineated into three i.e. economic institution (government effectiveness, regulatory quality, rule of law, and control of corruption), financial institution (contract intensive money, lending rate, and financial deepening), and political institution (voice and accountability, and political stability and absence of violence). The study computed the Granger causality test using both the VECM and the Toda and Yamamoto [1] and Dolado and Lutkepohl [2] (TYDL) augmented VAR procedure. The causality result in the short run showed that none of the institutional quality variables have a causal effect on industrial output growth but the feedback was reported. In the long run, a bi-causal relationship was reported from government effectiveness, control of corruption, financial deepening, and voice and accountability t...

Corruption, Institutional Quality and Economic Growth in West African Countries (1995-2017)

Journal of Public Administration and Governance

This study examines the relationship among corruption, institutional quality and economic growth; and analyses the interaction effects of corruption and institutional qualities such as political stability and absence of violence (pv), government effectiveness (ge), regulatory quality (rq), control of corruption (cc), voice and accountability (va), and rule of law (rl) on economic growth (gdp) in West African Countries. Time series data covering the period between 1995 and 2017 were employed with Panel VAR method. Our results showed that corruption (cp) and economic growth are negatively related at lag one, and positively related at lag two, but the results were statistically insignificant. All institutional quality indicators, except ge are negatively related to economic growth at lag one, but at lag 2, positively related except rq, cc, and pv. These results were also statistically insignificant, except that of pv which is statistically significant.Our results also showed that inter...