Institutions and Macroeconomic Instability in Nigeria

Oludiran Akinleye and Ibrahim Adekunle

MPRA Paper from University Library of Munich, Germany

Abstract: Despite the massive resources emanating from oil wealth, Nigeria has been unable to achieve long-term growth stabilisation, and the implications have been more injurious than ever imagined. The problems of bad leadership, wrong policy measures, among other contending issues, have been attributed to this growing menace. This has led to critical thinking at virtually all level of social gatherings as to how the institutions can be best harnessed for macroeconomic stabilisation in Nigeria. In evaluating its objectives, this study employs the two-step Engle and Granger estimation procedure to analyse time-series data on price instability index and institutional quality index to account for the variations in macroeconomic instability as induced by institutional frameworks. Findings reveal that rule of law, control of corruption, government effectiveness and political stability and the absence of violence have a significant but negative relationship with macroeconomic instability in Nigeria in the short run. Based on findings from the study, the government should create an enabling environment for the society to engage its leadership challenges to be able to stamp out impediments that will deter its ability to stabilize its macroeconomic objectives.

Keywords: Institutional Framework; Macroeconomic Stabilization; ECM; Nigeria. (search for similar items in EconPapers)
JEL-codes: O43 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:98829

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