Institutional Quality, Development Strategies and Productive Employment Growth: Evidence from Nigeria

Abstract

The paper examined the structural linkage between institutional quality, financial inclusion and productive employment growth in Nigeria during the period 1998-2017, employing Auto-regressive Distributed Lag (ARDL) bounds testing to cointegration technique. The results of the relationship between institutional quality and inclusive growth showed that institutional quality had an overall significant impact on the real GDP per person employed. Contrary to its a-priori expectation, the technology choice index was positively signed, while all other explanatory variables were found to exert a positive statistically significant impact on inclusive growth in Nigeria both in the short-run and the long-run. The findings of the analysis show that the state institutions remains the major reference point in the conceptualization of a dynamic inclusive growth. Given her relatively labour-abundant resource endowment, building certain degrees of institutional capacity and character is much needed to harness the conversion of the nation’s socio-economic potentialities into realities of sustainable broad-based productive employment growth. Therefore, a comparative advantage conforming development strategy should become the policy priority of the Nigerian government. This would lift millions out of poverty and bridge the long standing huge inequality gaps amongst the citizens.