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Institutions and Macroeconomic Instability in Nigeria

Author

Listed:
  • Akinleye, Oludiran
  • Adekunle, Ibrahim

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.

Suggested Citation

  • Akinleye, Oludiran & Adekunle, Ibrahim, 2019. "Institutions and Macroeconomic Instability in Nigeria," MPRA Paper 98829, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98829
    as

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    File URL: https://mpra.ub.uni-muenchen.de/98829/1/MPRA_paper_98829.pdf
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    References listed on IDEAS

    as
    1. Elisa Valeriani & Sara Peluso, 2011. "The Impact Of Institutional Quality On Economic Growth And Development: An Empirical Study," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(6), pages 1-25, October.
    2. Anne B. Koehler & Emily S. Murphree, 1988. "A Comparison of the Akaike and Schwarz Criteria for Selecting Model Order," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 37(2), pages 187-195, June.
    3. Siba, Eyerusalem G., 2008. "Determinants of Institutional Quality in Sub-Saharan African Countries," Working Papers in Economics 310, University of Gothenburg, Department of Economics.
    4. Sudip Ranjan Basu, 2008. "Institution and Development Revisited:A Nonparametric Approach," IHEID Working Papers 05-2008, Economics Section, The Graduate Institute of International Studies, revised Mar 2008.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Institutional Framework; Macroeconomic Stabilization; ECM; Nigeria.;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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