Journal of Applied Economics in Developing Countries
Vol 9, No 2 (2024): Journal of Applied Economics in Developing Countries

CORRUPTION AND ECONOMIC GROWTH IN NIGERIA: DOES DATA SUPPORT “GREASE THE WHEELS” OR “SAND THE WHEELS”?

Felix Odunayo Ajayi (Department of Economic, Olabisi Onabanjo University, Ago-Iwoye)
Aduralere Opeyemi Oyelade (Department of Economic, Olabisi Onabanjo University, Ago-Iwoye)
Gideon Olugbenga Olanrewaju (Department of Economics, Babcock University, Ilishan-Remo)



Article Info

Publish Date
30 Sep 2024

Abstract

The study investigated the relationship between corruption and economic growth in Nigeria using data from 1996 to 2020. The research employed the Fully Modified Ordinary Least Squares (FMOLS) method and Granger causality tests. The FMOLS results indicated that both gross fixed capital formation and urbanization significantly and positively influence economic growth in Nigeria, whereas the corruption index has a negative and significant effect, aligning with the "sand the wheels" theory. The Granger causality analysis showed a unidirectional relationship, where gross fixed capital formation Granger-causes GDP growth rate, and GDP growth rate Granger-causes both the corruption index and the relative corruption ranking in Nigeria. Based on these results, the study recommends that policymakers prioritise transparency and good governance by implementing e-governance initiatives to reduce bureaucratic hurdles and opportunities for corruption. Furthermore, there should be consistent monitoring and thorough evaluation of the impact of anti-corruption strategies on economic growth and development to ensure their effectiveness.

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Journal Info

Abbrev

jaedc

Publisher

Subject

Economics, Econometrics & Finance

Description

FOCUS This journal focused on economics, business, and management in developing countries studies and presents developments through the publication of articles and research reports. SCOPE The Journal of Applied Economics in Developing Countries (JAEDC) specializes on Economics, Business, and ...