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Democratic Government, Corruption Control, and Economic Development: Evidence from Nigeria with Cointegration Approach

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  • Ajayi, Temitope Abraham

Abstract

Nigeria returned to a democratic government in 1999. Evidence in the literature shows that democracy promotes economic development. In the recent past, the democratic trajectory of Nigeria has led to empirical debates about the democratization process of the developing states in particular, which is prone to multifaceted challenges. This study examines the impact of democratic government on Nigerian economic development using the VAR autoregressive approach. Our empirical work suggests that democracy has a long-run relationship with the economic development of Nigeria. Against our a priori expectations and established positions in some segments of the literature, this study identifies a negative impact of democracy on the economic development of Nigeria within our study period. On the other hand, the quality of the rule of law positively impacts economic development in Nigeria. Furthermore, the study finds a positive impact of corruption control in Nigeria with economic development, although observable evidence shows that the Nigerian government’s anti-corruption institution is weak. This research paper recommends institutional reforms for the democratization process of Nigeria to fully harness one of the most significant dividends of democracy-economic development.

Suggested Citation

  • Ajayi, Temitope Abraham, 2021. "Democratic Government, Corruption Control, and Economic Development: Evidence from Nigeria with Cointegration Approach," MPRA Paper 110090, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110090
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    References listed on IDEAS

    as
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    4. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    5. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Nigeria; Democracy; Development; Corruption; Cointegration.;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • K0 - Law and Economics - - General
    • K2 - Law and Economics - - Regulation and Business Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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