COMPARATIVE ADVANTAGE-DEFYING STRATEGY: AN ELUSIVE QUEST FOR INCLUSIVE GROWTH IN LAGGING ECONOMIES

Abstract

Despite the “improved” political institutions of governance in the wake of enthronement of democracies, the resource-endowed developing countries still remain largely the most lagging economies in the world. It is with such quest to break the mold of laggedly daunting development challenges of pervasive poverty, huge inequalities and joblessness that this paper examined the structural linkage between institutional quality, the preferred development strategy and broad-based productive employment growth in Nigeria during the period 1998-2017, employing Auto-regressive Distributed Lag (ARDL) bounds testing to cointegration technique. The results of the study revealed that institutional quality had an overall significant impact on the real GDP per person employed. However, contrary to its a-priori expectation, the technology choice index was positively signed, indicative of the country’s adoption of an inappropriate development strategy. Meanwhile, all other explanatory variables were found to exert a positive statistically significant impact on inclusive growth in Nigeria both in the short-run and the long-run. The findings of the analysis showed that the state institution remains the major reference point in the conceptualization of a dynamic inclusive growth. Given her relatively labour-abundant resource endowment, building certain degrees of institutional capacity and character is much needed to harness the conversion of the nation’s socio-economic potentialities into realities of sustainable broad-based productive employment growth. Therefore, a comparative advantage-conforming development strategy should become the policy priority of the Nigerian government. This would lift millions out of poverty and bridge the long standing huge inequality gaps amongst the citizens.