Institutional Quality, Social Infrastructure and Economic Growth in Nigeria 1990 -2017

Uwoikor, Ekenerono Mordecai

Abstract


The study examined the effect of institutional quality and social infrastructure on economic growth in Nigeria between the periods 1990 to 2017. The study was based on institutional theory of growth which says institution and quality of institution are important to economic growth. The study used secondary data collected from various resources from 1990 to 2017. Institutional quality was proxy by corruption perception index for Nigeria, economic freedom of exchange regulatory quality, and effectiveness of governance. Social infrastructure was proxy by doctor-patient ratio, secondary school and tertiary education enrollment, while economic growth was represented by growth of real Gross Domestic product at 2009 constant price. Engle-Granger Error correction model estimation techniques was applied for estimating the partial effect of institutional quality and social infrastructure on economic growth. The Phillip-Perron Unit root test results revealed that all the variables have unit root at level. However, they became stationary after 1st differencing. Johansen Co-integration test result  revealed that there is a stable long run relationship between institutional quality and economic growth on one hand, and relationship between social infrastructure and economic growth on the other hand. Estimate from the parsimonious error correction model proved that institutional quality proxy by quality of regulation, effectiveness of governance, economic freedom, and financial system efficiency have positive relationship with economic growth while corruption perception has negative impact on economic growth. Social infrastructure variables of doctor-patient ratio and tertiary school enrollment had positive impact on economic while secondary was not significant it was therefore recommended that government should strengthen institution quality and invest in development of Nigeria’s social infrastructure.

 


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