Resource Curse, Institutional Quality and Economic Growth: ARDL Analysis

Eugene Iheanacho


This study examines the interaction effects between resource curse, institutional quality and economic growthin Nigeria over the period 1986 – 2016using the auto-regressive distributed lag (ARDL) approach to co-integration analysis. Controlling for the possible effects of gross capital formation, oil price, credit to private sectors and trade openness on economic activities.  This study found that there is a long-run relationship among the variables in all the specifications. Second, the interaction term between oil rent and corruption index were found to be negative and significant, indicating that both reduces economic growth.This coexists with high level of poor governanceresulted to a negative impact on income per capita. In general, the results highlight the importance of the institutional quality resource abundance and economic growth in Nigeria. The institutional quality could therefore be the right strategy to lessening the high level oil rent and speedy economic growth in the Nigerian economy.

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