ASSESSING THE LONG-RUN IMPACT OF INSTITUTIONS ON ECONOMIC GROWTH: THE NIGERIAN EXPERIENCE

Abstract

This paper investigates the long run impact of institutions (proxied by rule of law, property rights and political terror) on Nigeria’s economic growth from 1981 to 2017, using the Dynamic Ordinary Least Squares technique on annual data obtained from secondary sources. A long-run relationship was found between the explanatory variables and economic growth. The empirical evidence is in favour of a statistically significant and positive relationship between property rights and growth. Law and order was found to be statistically significant and positively associated with growth, while political terror exerted a negative impact on growth in the period of investigation. Deepening of institutions through well-developed property rights is recommended, including the enthronement of law and order to provide a mechanism for dealing with political terror, strengthen public trust and confidence and thus promote economic growth.