Title: How corruption affects economic growth in Nigeria

Authors: Shehu U.R. Aliyu, Akanni O. Elijah

Addresses: Department of Economics, Bayero University, Kano, Nigeria. ' Department of Economics, Bayero University, Kano, Nigeria

Abstract: The World Bank (2010) asserts that corruption is the single greatest impediment to economic growth in third world countries. This paper investigated the impact of corruption on economic growth in Nigeria from 1986 to 2007. An endogenous economic growth model developed by Barro (1991) was modified and applied to the Nigerian case using a time series data on some critical variables in the Nigerian economy. The model was estimated using Engle and Granger|s (1987) co-integration and error correction technique. Empirical findings partly overturn the view in the literature that corruption is a beneficial |grease| that lubricates the engine of economic growth. Meaning, corruption decelerates economic growth in Nigeria. The paper recommends shortening of labyrinthine structure in general administration of government and quick dispensation of justice in order to stem corruption and promote economic growth in Nigeria.

Keywords: economic growth; government expenditure; Nigeria; Africa; World Bank; growth impediments; third world; endogenous growth; Robert Barro; time series data; critical variables; Nigerian economy; Robert Engle; Clive Granger; co-integration; error correction; growth deceleration; labyrinthine structures; bureaucracy; government administration; beneficial corruption; justice; legal remedies; global challenges; globalisation; business advancement.

DOI: 10.1504/JGBA.2011.041498

Journal for Global Business Advancement, 2011 Vol.4 No.2, pp.143 - 154

Published online: 25 Jul 2011 *

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