FISCAL POLICY- QUALITY OF LIFE NEXUS: DOES INSTITUTIONAL ENVIRONMENT MATTER?

Abstract

The study examines the impact of government expenditure on quality of life in Nigeria for the period of 1980 to 2022 using annual data from the World Development Indicators (WDI, 2022) of the World Bank. National Bureau of statistics (NBS, 2022) and Central Bank of Nigerian statistical bulletin (2022). Autoregressive Distributive Lag Model (ARDL) and the Toda-Yamamoto causality test were employed for the analysis. In the long run, all the variables are statistically significant except for corruption and gross domestic product. In the short run, all the variables are statistically significant and well signed, except for the quality of environment which is negatively related to the quality of life in Nigeria. The causality test shows a uni-directional causality between government expenditure and the quality of life in Nigeria while a bi-directional causality was running from quality of life and government expenditure in Nigeria. the study therefore recommends that government is encourage to exhibit fiscal discipline and be guided by fiscal rule by channeling more resources to areas affected to prevent further environmental degradation in Nigeria. the study recommends that government in Nigeria should try to meet up with the United Nations required budget allocation on education sector in order to increase more investments in education can also improve on the funding of existing educational institutions and this will bring out more quality graduates, this ton a large extent will improve the quality of life of the people in return