Abstract
Nigeria returned to a democratic government in 1999. Evidence in the literature shows that democracy promotes economic development. In the recent past, the democratic trajectory of Nigeria has led to empirical debates about the democratization process of the developing states in particular, which is prone to multifaceted challenges. This study examines the impact of democratic government on Nigerian economic development using the VAR autoregressive approach. Our empirical work suggests that democracy has a long-run relationship with the economic development of Nigeria. Against our a priori expectations and established positions in some segments of the literature, this study identifies a negative impact of democracy on the economic development of Nigeria within our study period. On the other hand, the quality of the rule of law positively impacts economic development in Nigeria. Furthermore, the study finds a positive impact of corruption control in Nigeria with economic development, although observable evidence shows that the Nigerian government’s anti-corruption institution is weak. This research paper recommends institutional reforms for the democratization process of Nigeria to fully harness one of the most significant dividends of democracy-economic development. Keywords: Nigeria, Democracy, Development, Corruption, Cointegration. DOI: 10.7176/EJBM/13-15-01 Publication date: August 31 st 2021
Highlights
The presumption that democratic government better redistributes national income among the population has become one of the leading discussions among economic theorists, political thinkers, and perhaps the laymen in the 21st century
We introduce a composite explanatory variable to determine the impact of the rule of law in Nigeria's democratic government in the model
We introduce an explanatory variable for Nigeria's corruption control under the democratic government
Summary
The presumption that democratic government better redistributes national income among the population has become one of the leading discussions among economic theorists, political thinkers, and perhaps the laymen in the 21st century. Democracy has its origins in the western culture of governance, and democratic states are arguably the most exportable government systems in the modern world to the other parts of the world. Democracy probably has shortcomings, the likelihood exists that an average form of democratic government is better than an autocratic regime. The democratic credentials of many of the developing countries that have recently embraced democracy after some prolonged periods of military dictatorship have come under empirical scrutiny in the literature. The investigation of such democratic institutions arose given the perceived differences in the operations and implementations of the developing states' democratisation process and the first world countries.
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