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RE-EXAMINING THE NEXUS BETWEEN CORRUPTION AND ECONOMIC GROWTH IN NIGERIA: AN ARDL APPROACH
Abstract
In this paper, the authors re-examined the nexus between corruption and economic growth in Nigeria using the autoregressive distributed lag (ARDL) approach. The study is motivated by the increasing rate of corruption in Nigeria despite the efforts of government towards curbing it and the dearth of studies on the influence of corruption along with unemployment, GDP deflator and FDI on economic growth in Nigeria. The findings show that corruption has a long-run positive impact on economic growth in Nigeria. This is with falling impacts of unemployment and foreign direct investment on economic growth. However, like corruption, the GDP deflator shows a rising impact on economic growth in the long-run. Since in the long run, we are all dead as posited by Maynard Keynes, it is necessary to fight corruption in the short-run in order to promote economic growth. Therefore, we recommend that the governments at all levels must strengthen their institutional frameworks to block the loopholes that promote corruption in the Nigerian economy and enshrine the culture of zero tolerance for corruption. There is also urgent need for establishment of special corruption court for quick adjudications of corruption cases while optimal regulation of the financial sector and forex market must be rigorously pursued. Besides, unemployment must be tackled in order to enhance the growth of the economy.
Keywords: Corruption, economic growth, autoregressive distributed lag JEL Classifications: O49; C32