SCRUTINIZING THE EFFECT OF CORRUPTION ON NIGERIA'S GROWTH POTENTIAL: A COMPREHENSIVE ANALYSIS OF GOVERNMENT EXPENDITURE

Abstract

This study investigates the impact of government expenditure and corruption on growth in Nigeria from 1990 to 2020. The study uses the autoregressive distributed lag model, fully modified ordinary least squares, and dynamic ordinary least squares as alternative techniques for estimation. The results indicate that an increase in government expenditure and a reduction in corruption have a significant positive effect on short-term and long-term growth. Furthermore, corruption reduction enhances the increasing effect of government expenditure on economic growth. However, corruption reduction beyond a threshold of 42.25 diminishes the increasing effect of government expenditure on economic growth. To achieve sustained growth in Nigeria, policymakers must raise government expenditure and minimize corruption