Institutional Foundation of Unemployment in Nigeria

Abstract

This paper shows that the attainment and sustenance of full employment in a modern economy is dependent on the quality of political leaders, their choice of discount rate and the institutional restrictions that place a limit on predation of public resources or it conversion to private use. In the absence of institutional inhibitions, political leaders can decide to build either a development or a predatory state. High quality political leadership can ensure zero or near-zero predation and, in addition, build institutions to accelerate growth and development and ensure full or near full employment. Poor quality and predatory political leadership can lead to a reverse case, causing economic stagnation and mass unemployment. Furthermore, this paper tries to establish the fact that this macroeconomic problems of unemployment is a symptoms of deeper institutional problems. This deployment of monetary or fiscal policy instrument without taking into consideration the institutional environment and preferences of its political leaders will lead to policy failures. Institutional changes that will produce full employment must therefore be a package that aligns political leadership preferences with the macroeconomic objective of full employment.