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Corruption and Economic Growth in Nigeria: 1986 -2007

Shehu Aliyu and Akanni Oludele Elijah

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract The World Bank (2000) asserts that corruption is the single greatest impediment to economic growth in third world countries. This study was set out to investigate the impact of corruption on economic growth in Nigeria from 1986 to 2007. A Barro-type endogenous growth model was adopted and reconditioned to suit the purpose of the paper. The Engle-Granger (1987) cointegration and error correction mechanism (ECM) techniques were employed to unit root properties of the variables, their long run relationship and to determine values of long run parameters. The results show that corruption exerts significant direct effect on economic growth and indirectly via some critical variables examined by the paper which include Government Capital Expenditure, Human Capital Development and Total employment. The paper discovers that about 20% of the increase in government capital expenditure ends up in private pockets. It is, therefore, recommended that the government should consolidate on its efforts to fight corruption to a standstill in the country.

Keywords: corruption; economic growth; cointegration (search for similar items in EconPapers)
JEL-codes: H50 H52 O50 (search for similar items in EconPapers)
Date: 2008-10-10, Revised 2008-12-07
New Economics Papers: this item is included in nep-afr
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