Quality of Governance and Economic wellbeing

The Nigerian Experience

Abstract

Governance can be good or bad. Good governance promotes economic well being, while bad governance undermines it through harsh policies and poor implementation of the good policies. With the experience of the developed countries of the world, democracy is associated with good governance. However, with more than 20 years of democratic experience in Nigeria, the poor state of the economic indicators of wellbeing continued to go down. Based on the foregoing, this study examined the impact of governance on economic wellbeing in Nigeria for the period 1996q1-2018q4 using autoregressive distributed lag model (ARDL) bounds test approach. Per capita GDP growth was used as a proxy for economic wellbeing while regulatory quality index was used as proxy for quality of governance. The cointegration test result showed that there is a long run relationship between quality of governance and economic wellbeing. The study findings show that quality of governance has a negative significant impact on economic wellbeing in both short- and long-run. Based on the findings and the definition of regulatory quality by the worldwide governance indicators as perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development; the study recommends for an improved oversight function by the legislative arm of the government to ensure that public policies and regulations are properly implemented to promote private sector development and the economic wellbeing of the Nigerian populace.