IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 10 NO. 11 2024
DOI: 10.56201/ijssmr.v10.no11.2024.pg.186.196

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Institutional Factors and Economic Growth in Nigeria Oluwaseun Adeniran Sunday

Oluwaseun Adeniran Sunday, Zechariah Wanujeh and Hamisu Ali

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Abstract

This study investigates the relationship between institutional factors and economic growth in Nigeria from 1996 to 2022. It aims to examine the direction of causality among measures of institutional factors and economic growth. The endogenous growth theory provided the theoretical framework for the study. Data were obtained from the World Bank Database. Economic growth was measured using gross domestic product per capita and institutional factors were measured by political stability, government effectiveness, rule of law, and corruption. The Toda-Yamamoto non-granger causality test was used to determine the direction of causality among measures of institutional factors and economic growth. There is unidirectional causality running from political stability to economic growth, government effectiveness to economic growth, and from the rule of law to economic growth. There is bidirectional causality between corruptions to economic growth. The results suggest that strengthening institutions, improving governance, and promoting transparency are essential for unlocking Nigeria’s economic potential. The study recommends judicial reforms, anti-corruption measures, and capacity building to foster a conducive environment for economic growth.

keywords:

Economic growth, Institutional factors, Nigeria, Rule of law, Political stability,

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