Corruption and Economic Growth in Nigeria

Abstract

This paper studied the effects of corruption on economic growth in Nigeria with the aim of estimating the level of the impact to aid in fine tuneing economic growth policies formation. Data from 1996 – 2016, and Autoregressive distributed lag (ARDL) bound test estimation technique were used for the investigation. Controlling for human capital, physical capital investment and trade openness, findings revealed that corruption exert a significant negative impact on economic growth in Nigeria. A unit improvement in corruption (using Transperance International perception index) increases economic growth by 1.3 percent and 1.95 percent in the short-run and long-run respectively. The paper, thus, recommends that there should be renewed efforts to combat corruption to facilitate economic growth: Nigeria government should make all the necessary efforts to scale up its fight against corruption by strengthening the anti-corruption agencies to improve on their works, provide special courts to try corruption cases speedily, reform the economy to be more market driven, and pay living wage to workers. In addition, Nigerians should ultimately take ownership of the fight against corruption by voting in leaders with integrity, and continually demand good governance form them.

Keywords: Corruption, Economic growth, level of impact, Autoregressive Distributed Lag, (ARDL).