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Government Size, Political Institutions and Output Growth in Nigeria

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  • Fasoranti, Modupe Mary
  • Alimi, Rasaq Santos

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.

Suggested Citation

  • Fasoranti, Modupe Mary & Alimi, Rasaq Santos, 2017. "Government Size, Political Institutions and Output Growth in Nigeria," MPRA Paper 80562, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80562
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    References listed on IDEAS

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    More about this item

    Keywords

    Democracy; government size; external debt; public debt; Nigeria;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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