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Fiscal Policy and Human Development in Nigeria (1986-2017)

Author

Listed:
  • Okere P.A. Ph.D

    (Department of Banking and Finance, Imo State Polytechnic, Umuagwo-Ohaji, Nigeria)

  • Uzowuru L.N Ph.D

    (Department of Banking and Finance, Federal Polytechnic, Nekede Imo State, Nigeria)

  • Mbaeri C.C. Ph.D

    (Department of Banking and Finance, Imo State Polytechnic, Umuagwo-Ohaji, Nigeria)

Abstract

This study examined the effect of fiscal policy on human development in Nigeria using time series annual data from 1986-2017. The study used secondary data sourced from the Central Bank Nigeria annual statistical bulletin, World Development Indicator and Federal Inland Revenue Service publications. Fiscal policy instruments were proxied by government recurrent expenditure (GRE), government capital expenditure (GCE) and tax revenue (TRV) while human development was proxied by Human Development Index (HDI). The data were analyzed using Autoregressive Distributed Lag (ARDL) which revealed that all the series were stationary and adequately cointegrated. The study revealed a positive and significant relationship between fiscal policy and Human development in Nigeria. The study also found that recurrent expenditure exerts positive relationship while the capital expenditure exerts positive but insignificant relationship. The tax revenue reveals negative though insignificant relationship also. The study recommends that government should restructure its revenue base to finance fiscal policy expansion rather than embarking on external borrowing. This can be achieved by improving its revenue sources and efficient pursuit of tax reforms which will help to minimize tax avoidance, diversion and invasion. Again, government fiscal policies should place greater emphasis on the principles of effective taxation aimed at promoting investment and the growth of the human development.

Suggested Citation

  • Okere P.A. Ph.D & Uzowuru L.N Ph.D & Mbaeri C.C. Ph.D, 2022. "Fiscal Policy and Human Development in Nigeria (1986-2017)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(5), pages 545-553, May.
    • Handle: RePEc:bcp:journl:v:6:y:2022:i:5:p:545-553
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    References listed on IDEAS

    as
    1. Grace N Ofoegbu & David O Akwu & Oliver O, 2016. "Empirical Analysis of Effect of Tax Revenue on Economic Development of Nigeria," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 6(10), pages 604-613.
    2. Grace N. Ofoegbu & David O. Akwu & Oliver O, 2016. "Empirical Analysis of Effect of Tax Revenue on Economic Development of Nigeria," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 6(10), pages 604-613, October.
    3. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    Full references (including those not matched with items on IDEAS)

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