The Influence of Institutions in Poverty-Growth Nexus: Evidence from Nigeria

Abstract

This paper investigates the impact ofpoverty on economic growth in Nigeria
with moderating role of institutions using a time series data sourced from `the
World Development Indicators ranging from 1990 to 2023. The pre-
estimation test was done using PP and KPSS, followed by the structural break
test using Zivot and Andrews (1992) and perron (1997) to establish break in
series. The ARDL technique was applied to incorporate structural breaks in
estimating the model. The result of the estimate model indicate that poverty
has an inverse relationship and significant impact on economic growth
similarly, institution proxied as corruption also follows the same patter with
no significant impact on growth. There appears to be a co-movement between
poverty and corruption with 94.7% adjustment to equilibrium. Implying that
the interaction between poverty and institution negatively affect growth.
Increase in government expenditure in critical sectors of the economy such
agriculture, security, infrastructure in education and transportation system
are suggested policy tools.