Market Economy and Government Regulations in Nigeria

Abstract

In a modern market economy, government influence extends to almost all areas of social life. Government cannot only influence a market economy through financial monetary and other forms of metro-policies, but also lay down the rules of the game in the field of micro-enterprise development by such means as economic regulations. This paper explores the role of regulation in economic performance in Africa using an econometric model. More precisely, it assesses through econometric modeling the impact of variations in the quality of regulation on economic performance. Although Olson’s, et al., (1998): earlier studies have looked at governance as a cause of cross-country productivity or income differences, which was further buttressed by Kaulman and Kraay, (2002). This paper along the line differs in concentrating on regulation rather than wider governance issues. The results confirm that “good” regulation is associated with higher economic growth.

Keywords:economic growth; regulation: governance: institutions.