Authors: David O. Fadiran; Olusegun A. Akanbi
Addresses: Department of Economics, University of South Africa, Hazelwood, Pretoria, South Africa ' Department of Economics, University of South Africa, Hazelwood, Pretoria, South Africa
Abstract: This paper examines institutions as a determinant of external debt. We employ a recently constructed data set on institutions for Nigeria, which is constructed using a different methodology from the oft used polity series and also unbundles institutions into several sub-categories. The results show that specific institutional categories such as 'the extent of arbitrary executive powers' and 'government secrecy' play a significant role in limiting debt levels. Furthermore, when we consider the composite institutions' measure that captures the totality of civil and political liberties, the empirical analysis suggests that it plays a significant role in limiting the levels of long-term external debt, as well as public and publicly guaranteed (PPG) external debt, in the long-run.
Keywords: political institutions; external debt; arbitrary executive powers; government secrecy; debt determination; sustainable economy.
International Journal of Sustainable Economy, 2018 Vol.10 No.1, pp.41 - 60
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