Government Size, Political Institutions and Output Growth in Nigeria

Modupe Mary Fasoranti and Rasaq Santos Alimi

MPRA Paper from University Library of Munich, Germany

Abstract: Nigeria has had an uninterrupted democratisation wave since 1999 and the country has had its share of macroeconomic instability in terms of high rates of inflation and huge debt profile due to high cost of governance. Against this background, this study test the hypothesis that government in young democracies tend to generates large government size and test also the hypothesis that the outgoing dictatorships of the day engaged in activities which would bequest the young democracies big bills to be repaid at the initial stages of those new democratic regimes. Applying time series analysis on Nigeria data for the period of 1960 to 2015, the study found that (i) democracy in Nigeria is associated with bigger government and huge public debts (ii) the hypothesis that outgoing dictatorship bequest the young democracies with big bills is not confirmed for Nigeria. Moreover, the study found evidence that as democracy mature over the long run, the size of government tends to decrease, this is suggestive that democracy needs time to adapt and evolve over time. This study has provided deeper understanding of the recent history of Nigeria in terms of its dynamics during political transitions.

Keywords: Democracy; government size; external debt; public debt; Nigeria (search for similar items in EconPapers)
JEL-codes: C52 E62 H11 O43 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-gro, nep-mac and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80562

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