IDEAS home Printed from https://ideas.repec.org/a/smo/jornl1/v4y2020i2p71-88.html
   My bibliography  Save this article

An Analysis of the Long-Run Relationship Between Corruption and Debt Sustainability in Nigeria

Author

Listed:
  • Matthew Terry RIVI

    (University of Jos-Nigeria)

  • Ishmael OGBORU

    (University of Jos-Nigeria)

  • Dooshima Jennifer RIVI

    (University of Mkar, Gboko, Benue State-Nigeria)

Abstract

Corruption and public debt have continued to increase in Nigeria despite the anti-corruption posture of governments over the years and justifications often advanced for accumulating debts. The rising tides of public sector corruption in Nigeria are pervasive with its debilitating effects on the economy. The government’s anti-corruption campaigns have produced minimal results than expected as the country’s performance on global ranking by Transparency International remains dismal. Coincidentally, the fiscal stability of the economy has been jeopardized by increased public debts without commensurate investments injected into the system.This paper examined the long-run relationship between corruption and debt sustainability in Nigeria from 1996-2019 and employed the Vector Error Correction Model (VECM) technique of analysis.The choice of the period covered was informed by the need for a large dataset which guarantees a robust outcome in time series analysis and to capture the year 1996 when Nigeria made its first appearance in the assessment of global perception of corruption by Transparency International. Findings revealed that corruption is negatively related to debt sustainability in Nigeria, suggesting that higher incidences of corruption make public sector debt unsustainable. The speed of adjustment of -0.7575869 is negative which is statistically significant at 5%. This shows that there is 75.76%-point adjustment taking place each period towards the long-run periods. There is, therefore, the need for effective anti-corruption institutions, revisiting of the whistleblower policy, and entrenchment of the culture of transparency in financial transactions in order to curtail the ravaging effects of corruption in Nigeria.

Suggested Citation

  • Matthew Terry RIVI & Ishmael OGBORU & Dooshima Jennifer RIVI, 2020. "An Analysis of the Long-Run Relationship Between Corruption and Debt Sustainability in Nigeria," RAIS Journal for Social Sciences, Research Association for Interdisciplinary Studies, vol. 4(2), pages 71-88, November.
    • Handle: RePEc:smo:jornl1:v:4:y:2020:i:2:p:71-88
    as

    Download full text from publisher

    File URL: http://journal.rais.education/index.php/raiss/article/view/135/104
    Download Restriction: no
    File URL: http://journal.rais.education/index.php/raiss/article/view/135
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cooray, Arusha & Dzhumashev, Ratbek & Schneider, Friedrich, 2017. "How Does Corruption Affect Public Debt? An Empirical Analysis," World Development, Elsevier, vol. 90(C), pages 115-127.
    2. Eunji Kim & Yoonhee Ha & Sangheon Kim, 2017. "Public Debt, Corruption and Sustainable Economic Growth," Sustainability, MDPI, vol. 9(3), pages 1-30, March.
    3. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    4. Djumashev, Ratbek, 2006. "Corrupt Bureaucracy and Growth," MPRA Paper 2082, University Library of Munich, Germany.
    5. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
    6. Joao Tovar Jalles, 2011. "The Impact Of Democracy And Corruption On The Debt-Growth Relationship In Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(4), pages 41-72, December.
    7. repec:zbw:bofitp:2008_020 is not listed on IDEAS
    8. Lien, Da-Hsiang Donald, 1986. "A note on competitive bribery games," Economics Letters, Elsevier, vol. 22(4), pages 337-341.
    9. Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
    10. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    2. Breen, Michael & Gillanders, Robert, 2017. "Does Corruption Ease the Burden of Regulation? National and Subnational Evidence," MPRA Paper 82088, University Library of Munich, Germany.
    3. Gonzalo F. Forgues-Puccio & Ibrahim M. Okumu, 2012. "Does Size Matter? Scale, Corruption and Uncertainty," CDMA Working Paper Series 201207, Centre for Dynamic Macroeconomic Analysis.
    4. Axel Dreher & Martin Gassebner, 2013. "Greasing the wheels? The impact of regulations and corruption on firm entry," Public Choice, Springer, vol. 155(3), pages 413-432, June.
    5. Weiss, Eli & Rosenblatt, David, 2010. "Regional economic growth in Mexico : recent evolution and the role of governance," Policy Research Working Paper Series 5369, The World Bank.
    6. Axel Dreher & Martin Gassebner, 2007. "Greasing the Wheels of Entrepreneurship? The Impact of Regulations and Corruption on Firm Entry," KOF Working papers 07-166, KOF Swiss Economic Institute, ETH Zurich.
    7. Maurizio Lisciandra & Emanuele Millemaci, 2017. "The economic effect of corruption in Italy: a regional panel analysis," Regional Studies, Taylor & Francis Journals, vol. 51(9), pages 1387-1398, September.
    8. M. Molinari, 2014. "A Second Best Theory of Institutional Quality," Public Organization Review, Springer, vol. 14(4), pages 545-559, December.
    9. Nguyen, Ngoc Anh & Doan, Quang Hung & Nguyen, Ngoc Minh & Tran-Nam, Binh, 2016. "The impact of petty corruption on firm innovation in Vietnam," MPRA Paper 71902, University Library of Munich, Germany.
    10. Frank Bohn, 2005. "Public Investment under Ethnic Diversity and Political Uncertainty," Working Papers 200501, School of Economics, University College Dublin.
    11. Fhima, Fredj & Nouira, Ridha & Sekkat, Khalid, 2023. "How does corruption affect sustainable development? A threshold non-linear analysis," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 505-523.
    12. Andrew Hodge & Sriram Shankar & D. S. Prasada Rao & Alan Duhs, 2011. "Exploring the Links Between Corruption and Growth," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 474-490, August.
    13. Mavhungu Abel Mafukata, 2015. "Evolution of Corruption in Sub-Saharan Africa - from Nkruma to Mutharika The 2nd: Case Study of South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 4(1), pages 87-112, January.
    14. Tobias Zander, 2020. "Does corruption matter for FDI flows in the OECD? A gravity analysis," EIIW Discussion paper disbei280, Universitätsbibliothek Wuppertal, University Library.
    15. repec:zbw:bofitp:2008_020 is not listed on IDEAS
    16. Dridi, Mohamed, 2013. "Corruption and Economic Growth: The Transmission Channels," MPRA Paper 47873, University Library of Munich, Germany.
    17. Toke S. Aidt, 2009. "Corruption, institutions, and economic development," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(2), pages 271-291, Summer.
    18. Malay Biswas, 2017. "Are They Efficient in the Middle? Using Propensity Score Estimation for Modeling Middlemen in Indian Corporate Corruption," Journal of Business Ethics, Springer, vol. 141(3), pages 563-586, March.
    19. Eunji Kim & Yoonhee Ha & Sangheon Kim, 2017. "Public Debt, Corruption and Sustainable Economic Growth," Sustainability, MDPI, vol. 9(3), pages 1-30, March.
    20. Kouramoudou Keita & Hannu Laurila, 2016. "Efficient Corruption? Testing the hypothesis in African countries," Working Papers 1699, Tampere University, Faculty of Management and Business, Economics.
    21. Neiva de Figueiredo, João, 2013. "Are corruption levels accurately identified? The case of U.S. states," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 134-149.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:smo:jornl1:v:4:y:2020:i:2:p:71-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eduard David (email available below). General contact details of provider: http://journal.rais.education/index.php/raiss .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.