Abstract
Reducing corruption has been one major challenge facing government and policy makers in Nigeria. This study employs the ARDL, CCR and FMOLS methods to assess the determinants of corruption in Nigeria over the period 1984–2016. The result of the cointegration test indicates that corruption and its determinants (economic development, political rights, military expenditure, rents, civil liberties and openness) have a long-run relationship. The results of the ARDL, CCR and FMOLS estimation demonstrate that economic development, political rights, military expenditure, rents, civil liberties and openness, are the main determinants of corruption in the long-run. Higher-economic development, greater civil liberties, more openness and higher military expenditure are related to lower corruption, but higher rents and political rights are associated with higher corruption. Based on these outcomes, this study recommends policies to promote economic development, civil liberties, political rights and openness, including reducing the reliance on the oil sector to curb corruption in Nigeria.
Highlights
Nations across the globe face numerous challenges, corruption has been identified as a major problem both developed and developing countries continue to contend with
These findings indicate that the Autoregressive Distributed Lag (ARDL) model does not have serial-correlation and heteroscedasticity problems, including passing the normality test at 5%
Prob. 0.0001 0.0001 0.0679 0.0002 0.0057 0.0572 0.3431 and Fully Modified Ordinary Least Squares (FMOLS) (Panel D) results demonstrate that higher economic development, increases in military expenditure and greater civil liberties are associated with less corruption, while rents and political rights tend to worsen corruption in Nigeria, in the long-run
Summary
Nations across the globe face numerous challenges, corruption has been identified as a major problem both developed and developing countries continue to contend with. Abound in developing countries and transition nations (Aidt, 2003). A few researchers including Leff (1964) and Huntington (1968) opined that corruption promotes economic growth by increasing efficiency in countries where bureaucrats/government officials are inefficient and constitute barriers to investment growth. By bribing government or public officials, businessmen/investors spend less time in queue to obtain business permits and licences, including contract approvals. This leads to an increase in efficiency of the system, causing investment and production of goods and services to rise and boosting economic growth
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