Social Insurance Coverage, Economic Factors and Vulnerability to Corruption in Nigeria: A Non-Linear Cointegration Approach

Abstract

Social insurance is a critical component of social security but may not have been well defined in Nigeria. Since insurance is noted to have tacit claims on regulating human behaviour; social insurance should impel and compel public attitudes against the vulnerability of being drawn to the sin of corruption- an economic risk to society. Against this backlash, this study examined any linkage of the incidence of corruption in the Nigerian socio-economic life to the level of social insurance cover (SIC) while noting some intervening economic factors –inflation and interest rates. A non-linear ARDL technique was applied and is considered to be more predictive than my previous studies on social insurance. It is found that corruption is strongly linked to low SIC concomitantly with high inflation rate particularly from 2005 to date. Government should target innovative policies that will drive social insurance inclusion. These include attracting the informal sector to take-up micro life insurance, micro health insurance, and micro pension schemes. Government at various levels should design social interventions and financial assistance for less privilege. Monetary policy watchers should ingeniously work out low inflation regimes and low coupon fixed income instruments that moderate the interest rate spread in Nigeria to sustain SIC and reduce corruptive tendencies.