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

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.

Keywords: Nigeria, Democracy, Development, Corruption, Cointegration.

DOI: 10.7176/EJBM/13-15-01

Publication date:August 31^st 2021