Institutions and Macroeconomic Instability in Nigeria

Akinleye, Oludiran and Adekunle, Ibrahim (2019): Institutions and Macroeconomic Instability in Nigeria. Published in: (2019): pp. 1-14.

Abstract

Despite the massive resources emanating from oil wealth, Nigeria has been unable to achieve long-term growth stabilisation, and the implications have been more injurious than ever imagined. The problems of bad leadership, wrong policy measures, among other contending issues, have been attributed to this growing menace. This has led to critical thinking at virtually all level of social gatherings as to how the institutions can be best harnessed for macroeconomic stabilisation in Nigeria. In evaluating its objectives, this study employs the two-step Engle and Granger estimation procedure to analyse time-series data on price instability index and institutional quality index to account for the variations in macroeconomic instability as induced by institutional frameworks. Findings reveal that rule of law, control of corruption, government effectiveness and political stability and the absence of violence have a significant but negative relationship with macroeconomic instability in Nigeria in the short run. Based on findings from the study, the government should create an enabling environment for the society to engage its leadership challenges to be able to stamp out impediments that will deter its ability to stabilize its macroeconomic objectives.

• Item Type: MPRA Paper
• Language: English
• Keywords: Institutional Framework, Macroeconomic Stabilization, ECM, Nigeria.
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

References

References AgungI.N.(2009).Time series data analysis using E-view. Clementi Loop, Singapore: John Wiley & Sons (Asia) Pte Ltd. Ali A.&Rehman H. U (2015). Macroeconomic Instability and ItsImpact on Gross Domestic Product: AnEmpirical Analysis of Pakistan. MPRA Paper No. 71037, posted 1 May 2016 22:39 UTC Bartlett, W., Cuckovic, N., Jurlin, K., Nojkovic, A., &Popovski, V. (2013). Institutional quality and growth in EU neighbourhood countries. Search Working Paper, 5/11. Basu, S. R. & Das, M. (2010). Institution and development revisited: A nonparametric approach. Policy Issues in International Trade and Commodities. Study Series, No. 42, United Nations Conference on Trade andDevelopment, United Nations, New York and Geneva. Gujarati, D. N. and Dawn. C. P. (2009). Basic Econometric (5th Ed.). New York: McGraw-Hill Haghighi H.K., Sameti M.&Isfahani R.D (2012). The Effect of Macroeconomic Instability on Economic Growth in Iran. Research in Applied Economics4(3), 15-24. Hamsal, M.(2006).The effect of paradoxical strategies on firm performance :an empirical study of Indonesian banking industry. Dissertation, Graduate School of Management, Faculty of Economics, University of Indonesian. Ifere, E. O., Okoi, O. B.& Christian E. B. (2015). Institutional Quality, Macroeconomic Policy and Economic Development in Nigeria.Journal of Economics and Development Studies3(2), 140-145 Iyoboyi, M. & Pedro, L. M. (2014). Institutional capacity and macroeconomic performance: empirical evidence fromNigeria. Research in Applied Economics, 6(1), 38-60. IyohaM.A.(2004). Applied econometrics (Second Edition).Benin City,Nigeria:MindexPublishing Koehler &Murphree (1988). A comparison of Schwarz and Akaike Criteria for selecting model order. Journal of royal statistic society series, 37, 187-195 Olayungbo D.O. &Adediran K.A. (2017). Effects of Oil Revenue and Institutional Quality onEconomic Growth with an ARDL Approach. Energy and Policy Research, 4(1), 44-54. Oseni I. O. (2016). Exchange rate volatility and private consumption in Sub-Saharan African countries:A system-GMM dynamic panel analysis. Future Business Journal (Elselvier) 2, 103–115 Siba, E. G. (2008). Determinants of institutional quality in sub-Saharan African countries.Working Papers inEconomics, No 310, School Of Business, Economics and Law, University of Gothenburg. Valeriani, E. &Peluso, S. (2011). The impact of institutional quality on economic growth and development: Anempirical study. Journal of Knowledge Management, Economics and Information Technology, Issue 6.Retrieved from http://www.scientificpapers.org 02/01/2018 Zhuang J., Dios E., and Lagman-Martin A (2010)Governance and Institutional Quality and the Links with Economic Growth and Income Inequality: With Special Reference to Developing Asia. ADB Economics Working Paper Series No. 193