Investingating the Relationship Among Corruption, Poverty and Economic Growth – Nigerian Perspective
INVESTINGATING THE RELATIONSHIP AMONG CORRUPTION, POVERTY AND ECONOMIC GROWTH – NIGERIAN PERSPECTIVE
ABSTRACT A plethora of empirical studies attempted investigating the causal relationship between corruption and poverty. But the outcome of those studies produced mixed results in a regression model that captured only two variables. In this investigated bivariate model, economic growth as an important variable was not included. In fact, omitting such an important variable could seriously affect the research output. Therefore, the objective of this study is to fill the research gap by investigating the trivariate causality for Nigerian economy by incorporating economic growth as a third variable in the existing corruption and poverty bivariate model. The results of this study indicated that there is an existence of co-integration among the variables under investigation - characterizing a long run causality relationship among corruption, economic growth and poverty in Nigeria. The results of the dynamic economic growth model indicate the degree of growth influence linkage on corruption. The findings are suggesting that policies that enhance economic growth are expected to be precise in reducing corruption and poverty in Nigeria. Therefore, the government needs to give importance on the development of critical sectors that are growth enhancing. K EY WORD: Economic growth, poverty, corruption, co-integration, causality. 1.0 INTRODUCTION The Empirical studies that examined the causal relationship between corruption and poverty using bivariate granger causality frame works (such as Gupta et al., 2002; Negin, Abd Rashid, & Nikopour, 2010; Gyimah-Brempong, 2006; You and Khagram, 2004) have produced mixed results. The study of Negin, et al. (2010) suggested that there is a significant relationship between corruption and poverty, without including economic growth as the channel of transmission between corruption and poverty. Meanwhile, Gupta et al. (2002) found significant
ABSTRACT A plethora of empirical studies attempted investigating the causal relationship between corruption and poverty. But the outcome of those studies produced mixed results in a regression model that captured only two variables. In this investigated bivariate model, economic growth as an important variable was not included. In fact, omitting such an important variable could seriously affect the research output. Therefore, the objective of this study is to fill the research gap by investigating the trivariate causality for Nigerian economy by incorporating economic growth as a third variable in the existing corruption and poverty bivariate model. The results of this study indicated that there is an existence of co-integration among the variables under investigation - characterizing a long run causality relationship among corruption, economic growth and poverty in Nigeria. The results of the dynamic economic growth model indicate the degree of growth influence linkage on corruption. The findings are suggesting that policies that enhance economic growth are expected to be precise in reducing corruption and poverty in Nigeria. Therefore, the government needs to give importance on the development of critical sectors that are growth enhancing. K EY WORD: Economic growth, poverty, corruption, co-integration, causality. 1.0 INTRODUCTION The Empirical studies that examined the causal relationship between corruption and poverty using bivariate granger causality frame works (such as Gupta et al., 2002; Negin, Abd Rashid, & Nikopour, 2010; Gyimah-Brempong, 2006; You and Khagram, 2004) have produced mixed results. The study of Negin, et al. (2010) suggested that there is a significant relationship between corruption and poverty, without including economic growth as the channel of transmission between corruption and poverty. Meanwhile, Gupta et al. (2002) found significant