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Fiscal federalism and accountability in Nigeria: an ARDL approach

Author

Listed:
  • Olabanji Olukayode Ewetan
  • Romanus Osabohien
  • Oluwatoyin Augustina Matthew
  • Abiola Ayopo Babajide
  • Ese Urhie

Abstract

Purpose - The purpose of this paper is to examine the relationship between fiscal federalism and accountability in Nigeria. Corruption is a global plague and is endemic in nature. Several policies have been adopted by the Nigerian Government to institutionalize accountability and combat the scourge of corruption that have hindered socio-economic progress but to no avail. Design/methodology/approach - Thus, this study examined fiscal federalism and accountability issues in Nigeria using secondary data and used the auto-regressive distributed lag econometric technique to analyse the data. Findings - The results from this study reveal that fiscal federalism fails to mitigate corruption in the long run in Nigeria because of poor bureaucratic quality (BQ) and ineffective law and order (LOR). Social implications - Fiscal decentralization must be accompanied by legislations that will strengthen BQ of fiscal institutions at subnational levels and promote effective LOR. Originality/value - This study recommends that for fiscal federalism to mitigate corruption in the long run, government must adopt appropriate policies to improve BQ and further strengthen LOR in Nigeria. The finding also suggests that to promote public sector accountability in Nigeria, government should ensure the simultaneous decentralization of expenditure and revenue to lower tiers of government. This study provides detailed empirical evidence that fiscal decentralization without accountability will accentuate public sector corruption, and in the long run, weaken local economic development initiative to boost growth and development.

Suggested Citation

  • Olabanji Olukayode Ewetan & Romanus Osabohien & Oluwatoyin Augustina Matthew & Abiola Ayopo Babajide & Ese Urhie, 2020. "Fiscal federalism and accountability in Nigeria: an ARDL approach," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 24(2), pages 361-373, June.
    • Handle: RePEc:eme:jmlcpp:jmlc-05-2020-0046
    DOI: 10.1108/JMLC-05-2020-0046
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    Citations

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    Cited by:

    1. Yusuf Abdulkarim, 2023. "A systematic review of investment indicators and economic growth in Nigeria," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    2. Abdulkarim Yusuf & Saidatulakmal Mohd, 2023. "Growth and Fiscal Effects of Insecurity on the Nigerian Economy," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(4), pages 743-769, August.

    More about this item

    Keywords

    Accountability; Fiscal federalism; Fiscal decentralization; Autoregressive distributed lag; H77; R51;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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