Good Governance and Economic Development in Nigeria

Abstract

Evidence has shown that when a country’s overall governance quality and property rights system are weak, voluntary and market governance mechanisms have limited effectiveness. This may further generate economy-wide misallocation of resources and slower economic growth and make governance quality a major key factor for stable economic development which also prompted many international aid initiatives and domestic policies of developing countries to focus on improving public sector governance. This informs the need to carry out a study of this nature by examining the impact of governance quality on economic development in Nigeria. The study used the Autoregressive Distribution Lag (ARDL) method of analysis and granger causality test on secondary
data collected from World Bank data base and CBN statistical bulletin between 1982 and 2019. The results from the analysis showed that even though all the variables do not have significant impact on GR, CC and FDI_GDP exhibit a positive relationship with the GR while MC_GDP, RQ and VOA have negative relationship with GR. Also, the approximate ECM coefficient of -0.89 indicates that any deviation from the long-term equilibrium between variables is corrected by about 89% each year. Consequently, this study concludes that successful good governance mechanisms depend on good legal framework which is the bedrock for entrenching good governance measures in any country. Therefore, the study recommends among others, the need to put in place some measures of good governance quality which form the basis for promoting sound macroeconomic plans.