Corruption, Government Expenditures and Economic Performance: Nigeria’s Experience in the New Democratic Era (1999-2012)

Abstract

The paper employs the ordinary least squares (OLS) estimation technique to estimate a simple regression model with a dummy variable to investigate the effect of corruption and government expenditures on the performance of Nigeria‟s economy in the pre-democratic (1994-1998) and the democratic (1999 – 2012) eras using annual time series data sourced from the Central Bank of Nigeria Statistical Bulletin, and Transparency International. The analysis indicates that corruption had no significant impact on Nigeria‟s economic growth in both sub-periods. It further indicates that capital expenditure component of government expenditure negatively impacted growth in the sample periods. The impact of government recurrent expenditure on the growth of Nigeria‟s economy was found to be significantly negative in the 1994-1998 period, but significantly positive in the democratic period (1999-2012). The paper recommends measures to make government expenditure more productive – enhancing its contribution to the growth of the nation‟s economy.

Keywords: Corruption, Recurrent expenditure, Capital expenditure, Economic performance, Nigeria