Institutions, Governance Structure and Economic Performance Nexus in Nigeria

Abstract

The objective of this paper had been to investigate the institutions, governance structure and economic performance nexus in Nigeria. The paper adopted Ordinal Least Squares estimation technique and factor analysis to draw out important institution and governance structure variables that should be the focus of policy. The results showed that government effectiveness, voice and accountability were not only significant but entered the regression line with the correct a priori signs. Applying factor analysis to the model the result showed that the two factors- government effectiveness, voice and accountability-loaded high. The result shows that effective governance structure and institutions are of utmost importance for enhanced economic performance. The paper argues that effective governance structure and institution would result in efficient and effective implementation of policies and programmes that attract the right value and yield higher pay-offs; create the legal and regulatory framework that allows private entrepreneurs to discover their full potentials with healthy competition. It ensures that policies and legal framework are not subject to manipulation by political gladiators and transient the basic character of political regimes.

Key words: Governance Structure, Institutions, Factor Analysis and Economic Performance