Political Elites’ Corruption, Political Stability and Economic Growth in Nigeria: Bound Testing Approach
Keywords:
Corruption; Political Stability; Economic growth; ARDLAbstract
This paper investigated the impact of political elites’ corruption and political stability on economic growth in Nigeria using ARDL bound test approach. The study adopts annual time series data for the period of 1996-2017. The stationarity properties of the variables were tested using Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. Result from the bound test reveals that corruption exact a negative and significant impact on economic growth both in the short and long run, while political stability exact a positive and significant impact on economic growth in the short run and an insignificant impact in the long run. This finding reveals that political stability which includes stability in government, absence of internal, external and ethnic conflict/tension promote economic growth in Nigeria in the short run while corruption contributes to the Nigeria’s economic growth by reducing cumbersome bureaucratic control.
References
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Pareto, V. (1935). The Mind and Society. London: Jonathan Cape Limited.
Rose-Ackerman, S. (2008). Corruption and Government. International Peacekeeping, 15(3), pp. 328-343
Shera, A., Dosti, B. and Grabova, P. (2014). Corruption Impact on Economic Growth: An Empirical analysis. Journal of Economic Development, Management, IT, Finance and Marketing, 6(2), pp. 57-77.
Shuaib, I. M.; Ekeria, O.A. & Ogedengbe, A.F. (2016). Impact of Corruption on the Growth of the Nigerian Economy-1960-2012: Error Correction Mechanism (ECM). Journal of Scientific Research & Reports, 9(5), 1-13. www.sciencedomain.org.
Subarna, K.S. (2011). Corruption, Religion and Economic Performance in OPEC Countries. International Journal of Economics, Management and Accounting, 19(2), pp. 187-208.
Tanzi, V.; Davodi, B. & Sesan, A. (1997). Fighting Corruption in Nigeria Challenges for the Future. PPC Ibadan.
Tarek, G. (2014). Corruption and Economic Growth: Evidence from Egypt. Modern Economy, 5, pp. 1001-1009. http://dx.doi.org/10.4236/me.2014.510092.
This Day. (2019). Dasuki Fails to Stop Alleged Corruption Trial. https://www.thisdaylive.com/index.php/2019/02/28/.
Umeh, J.C.; Kyarem, R. & Martins, I. (2013). Beneficial grease hypothesis of public sector corruption in economic development: The Nigerian experience. Journal of Economics and Sustainable Development, 4(16), pp. 14-28.
World Bank Data (2018). Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=N.
Abu, N.; Karim, M. Z. A. & Aziz, M. I. A. (2015). Corruption, Political Instability and Economic Development in the Economic Community of West African States (ECOWAS): Is there a Causal Relationship?. Contemporary Economics, 9(1), pp. 45-60.
Amundsen, I. (2006). Political Corruption. U4 Issue.
Ayoola, O. S. & Lateef, A. I. (2014). Causality between Corruption and Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 5(6), pp. 45-55.
Council of Foreign Relations (2019). Tracking Election Violence in Nigeria. https://www.cfr.org /blog/.
Dickey, F. (1981). Testing for Unit Roots in Autoregressive Moving Average. Econometrika 75, pp. 335-346.
Egunjobi, A. T. (2013). An Econometric Analysis of the Impact of Corruption on Economic Growth in Nigeria. Journal of Business Management and Economics, 4(3), pp. 54-65.
Ekundayo, R. M.; Barnabas, O.; Adedoyin, L. I. & Olorunkanmi, I. J. (2013). Analysis of Corruption and Economic Growth in Nigeria. Afro Asian Journal of Social Sciences, 4(4.2), pp. 1-19.
Friedrich, C. (1972). The Pathology of Politics, Violence, Betrayal, Corruption, Secrecy and Propaganda. New York: Harper and Row.
Frunzik, V. (2000). Effects of Corruption on Economic and Political Development of Armenia. Unpublished Master’s essay, University of Armenia.
Gould, D. J. & Amaro-Reyes, J. A. (1983). The Effects of Corruption on Administrative Performance. Washington DC. World Bank Staff Working Paper No. 580.
Huntington, S. (1968). Political Order in Changing Societies. New Heaven: Yale University Press.
Kamaldeen, N. I.; Gunu, U. & Falilat, A. A. (2013). Impact of Corruption on Economic Development in Nigeria. Kuwait Chapter of Arabian Journal of Business and Management Review, 3(2), pp. 46-56.
Kyarem, N. R. & Bello, U. A. (2017). Corruption and Macroeconomic Performance in Nigeria: Evidence from Vector Autoregression Model. Ife Social Sciences Review 25(2), pp. 130- 149. www.issr.oauife.edu.ng/journal.
Kyarem, N. R. & Samuel, D. A. (2019). An Investigation of Economic Atavism in Impact Analysis of Corruption on Macroeconomic Performance in Nigeria. https://www.researchgate.net/publication/.
Leff, N. (1964). Economic Development through Bureaucratic Corruption. American Behavioral Scientist, 83(3), pp. 8-14.
Mauro, P. (1995). Corruption and Growth. Quarterly Journal of Economics, 110(3), pp. 681-712.
Mauro, P. (1997). Why Worry about Corruption? IMF Publications, Economic Issues, No.6.
Marquette, H. & Peiffer, C. (2014). Corruption and Collective Action: Shifting the Equilibrium? Research Paper No. 32. Birmingham: Developmental Leadership Program, University of Birmingham.
Mcmullan, M. (1961). A Theory of Corruption. Sociological Rev. 9(2): 181-201.
Michels, R. (1949). First Lectures in Political Sociology. New York: Harper Torchbooks.
Mosca, G. (1939). The Ruling Class. New York: McGraw Hill.
Nwankwo, O. (2014). Impact of Corruption on the Growth of Nigerian economy. Mediterranean Journal of Social Sciences, 5(6), pp. 41-46.
Nye, J.S. (1967). Corruption and Political Development: A Cost-benefit Analysis. Amer. Pol. Sci. Rev. 61(2), pp. 417-427.
Okeke, R. C. & Idike, A N. (2016). The Dialects of Political Economy and Elite Corruption in a Postcolonial State: A Nigerian Case Study. Kuwait Chapter of the Arabian Journal of Business and Management Review, 5(7), p. 55.
Premium Times (2019). Buhari Vows to Prove 16 billion PDP Administrations Spent on Power Project. https://www.premiumtimesng.com/news/top-news/31264.
Premium Times. (2019). Court Grant EFCC Permission to Prosecute Diezani Alison Madueke, Omokore. https://www.premiumtimesng.com/news/headlines/298794.
Pulse. (2019). EFCC recovers 9.2 Million Dollars, 74 thousand Pound Cash from ex-NNPC boss. https://www.pulse.ng/news/local/31264.
Phillips, P.C.B. & Perron, P. (1989). Testing for a Unit root in Time Series Regression, Biometrika 75, pp. 335-346.
Pesaran, M. H. & Shin Y. (2002). Long-run Structural Modelling. Econometric Reviews, 21, pp. 49–87.
Pesaran, M. H., Shin, Y. & Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16, pp. 289-326.
Pareto, V. (1916). The Mind and Society. A Treatise on General Sociology. New York: Dower.
Pareto, V. (1935). The Mind and Society. London: Jonathan Cape Limited.
Rose-Ackerman, S. (2008). Corruption and Government. International Peacekeeping, 15(3), pp. 328-343
Shera, A., Dosti, B. and Grabova, P. (2014). Corruption Impact on Economic Growth: An Empirical analysis. Journal of Economic Development, Management, IT, Finance and Marketing, 6(2), pp. 57-77.
Shuaib, I. M.; Ekeria, O.A. & Ogedengbe, A.F. (2016). Impact of Corruption on the Growth of the Nigerian Economy-1960-2012: Error Correction Mechanism (ECM). Journal of Scientific Research & Reports, 9(5), 1-13. www.sciencedomain.org.
Subarna, K.S. (2011). Corruption, Religion and Economic Performance in OPEC Countries. International Journal of Economics, Management and Accounting, 19(2), pp. 187-208.
Tanzi, V.; Davodi, B. & Sesan, A. (1997). Fighting Corruption in Nigeria Challenges for the Future. PPC Ibadan.
Tarek, G. (2014). Corruption and Economic Growth: Evidence from Egypt. Modern Economy, 5, pp. 1001-1009. http://dx.doi.org/10.4236/me.2014.510092.
This Day. (2019). Dasuki Fails to Stop Alleged Corruption Trial. https://www.thisdaylive.com/index.php/2019/02/28/.
Umeh, J.C.; Kyarem, R. & Martins, I. (2013). Beneficial grease hypothesis of public sector corruption in economic development: The Nigerian experience. Journal of Economics and Sustainable Development, 4(16), pp. 14-28.
World Bank Data (2018). Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=N.
Published
2020-05-26
How to Cite
Kyarem, R. ., Sani, I. A. ., Oyolola, F. ., & Lawal, O. . (2020). Political Elites’ Corruption, Political Stability and Economic Growth in Nigeria: Bound Testing Approach: Array. Acta Universitatis Danubius. Œconomica, 16(2). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/260
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