Inclusive Growth Effects of Institutional Quality in Nigeria (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...

Institutional Quality, Financial Inclusion and Inclusive Growth: Causality Evidence from Nigeria

Economic and Financial Review, 2019

The study examines the causal interactions among the institutional, financial and inclusive growth variables by employing Toda-Yamamoto (TY) Granger non-causality test within the augmented VAR framework. Annual time series, data from 1998 to 2017, were used. The TY analysis showed that all the variables, with the exception of financial inclusion index, Granger-caused inclusive growth, but without any evidence of feedback. However, a bidirectional causal relationship was found between inclusive finance and the interaction of institutional quality and financial inclusion. Thus, the null hypothesis of block exogeneity can be refuted when real GDP per person employed (RGDPE) is taken as the dependent variable. This implies that while the effects of institutional quality could vary widely in an economy, institutional quality appears to be the dominant driving force behind inclusive growth. 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 labourintensive development strategy, such that poor active households are comprehensively integrated into productive activities for optimal value-chain finance-growth inclusiveness. This should be able to address the protracted tripartite socioeconomic problems of poverty, inequality and unemployment in line with Lin's comparative advantage conforming hypothesis.

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.

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

International Journal of Research and Innovation in Social Science (IJRISS), 2024

The presence of institutional gaps in the Nigerian economy has enhanced the need to investigate the impact of institutional framework on economic growth from 1996 to 2022. Under the theoretical framework of the endogenous growth model, the dependent variable in this study was economic growth proxied by real gross domestic product while the independent variables of interest were gross fixed capital formation, labour force, research and development and the six indicators of institutional framework (voice and accountability, rule of law, regulatory quality, government effectiveness, control of corruption and political stability. The fully modified ordinary least square was used as the method of analysis and the results revealed that labour force, research and development and regulatory quality have a positive and significant impact on economic growth. Contrary, control of corruption, government effectiveness and gross fixed capital formation have a negative significant impact on economic growth. More so, voice and accountability and rule of law have an insignificant but positive and negative impact on economic growth respectively. Following these findings, this study concludes that institutional framework has a significant impact on economic growth and hence recommends that the federal government should implement extensive institutional reforms that cut across all the arms and levels of government, with emphasis on the autonomy of ministries, agencies, parastatals and commissions to exercise discretion effectively to enhance the implementation of anti-corruption measures, the rule of law and promote good governance practices which in all would foster sustainable economic growth.

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.

Institutional factors of inclusive growth: Evidence from Cte divoire

Journal of economics and international finance, 2021

Economic growth is important but not sufficient to generate a sustainable increase in individual welfare. Inclusiveness attributes to growth, the dual virtue of widening the space of economic and social opportunities; while ensuring a better application of distributive equity. In this perspective, Ali and Son suggest that growth is inclusive when combined with high income and equity. This study tries to verify this assertion in Cote d’Ivoire. This study focuses on ARDL Bounds approach for testing cointegration to measure the contribution of institutional factors to inclusive growth in Cote d’Ivoire over the period of 1984 to 2018. The International Country Risk Guide (ICRG) Index is used as institutional factors. The findings of empirical analysis suggest that only government stability as institutional factors have greatly and statically significant effect on inclusive growth in the short and long run. Key words: Ardl Bounds Test, Cote d’ivoire, inclusive growth, institutional fac...

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.

Institutional quality and economic growth: Empirical evidence from the Sudanese economy

Economic annals, 2014

This study aims to explore the extent to which conventional methods used in the majority of relevant growth studies can successfully interpret the economic performance of a highly underdeveloped African country such as Sudan. Applying an ARDL boundstesting approach to cointegration proposed by Pesaran et al. (2001), we look into the short-run as well as long-run relationships between institutional and various other key economic variables and economic growth over the period 1972-2008. The empirical results obtained suggest that, for the Sudanese economy, the quality of the institutional environment is one of the most important factors in defining economic prosperity.

Economic Diversification and Inclusive Growth in Nigeria: Does Institutional Quality Matter?

Economic Diversification and Inclusive Growth in Nigeria: Does Institutional Quality Matter?, 2022

Economic diversification is identified as a recipe for achieving inclusive growth and the role of institutions in strengthening the process of diversification cannot be ruled out. This study examined the role of institutions in helping economic diversification to achieve inclusive growth in Nigeria. Inclusive growth was measured using the growth rate of the inequality-adjusted human development index. Based on the Solow growth model and adopting the Johansen cointegration test, the results show that economic diversification in Nigeria does not significantly contribute to inclusive growth. The interaction of diversification with the institutions gave a positive significant result meaning that effective institutions will help economic diversification contribute to inclusive growth. Hence, the government using appropriate institutions can ensure an investment-friendly environment to support economic diversification and encourage inclusive growth in Nigeria.

Institutional Quality, Macroeconomic Policy and Economic Development in Nigeria

This paper examines the relationship between institutional quality, macroeconomic policy, and economic development in Nigeria. We employ data from four development indicators: the prevalence of undernourishment, life expectancy at birth, the Human Development Index (HDI) and Gross Domestic Product (GDP) per-capita from 1995 to 2013 to examine the validity of the proposed framework. Our result indicates an insignificant impact of domestic institution on Nigeria development indices. Interest rate was also found to have an insignificant impact on economic development in Nigeria, even when growth related indices were considered. On the other hand, government expenditure was found to exert a significant, though small, impact on the country’s development indices. Based on these, a holistic approach of attitudinal change, systematic strengthening and development of institutions is recommended for the attainment of the country`s developmental objectives.