Interconnections between governance shortcomings and resource curse in a resource-dependent economy
Purpose – The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality. Design/methodology/approach – The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error corr...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2024-11-01
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| Series: | PSU Research Review |
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| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/PRR-09-2021-0052/full/pdf |
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| author | Fisayo Fagbemi Richard Angelous Kotey |
| author_facet | Fisayo Fagbemi Richard Angelous Kotey |
| author_sort | Fisayo Fagbemi |
| collection | DOAJ |
| description | Purpose – The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality. Design/methodology/approach – The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019. Findings – Findings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions. Originality/value – The divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel. |
| format | Article |
| id | doaj-art-6ba9bf6ad2f443de9e8bacfba53efb18 |
| institution | OA Journals |
| issn | 2399-1747 2398-4007 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | PSU Research Review |
| spelling | doaj-art-6ba9bf6ad2f443de9e8bacfba53efb182025-08-20T02:17:58ZengEmerald PublishingPSU Research Review2399-17472398-40072024-11-018229732010.1108/PRR-09-2021-0052Interconnections between governance shortcomings and resource curse in a resource-dependent economyFisayo Fagbemi0Richard Angelous Kotey1Obafemi Awolowo University, Ile-Ife, NigeriaCity of Westminster College, London, UKPurpose – The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality. Design/methodology/approach – The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019. Findings – Findings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions. Originality/value – The divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel.https://www.emerald.com/insight/content/doi/10.1108/PRR-09-2021-0052/full/pdfNatural resource rentsResource curseInstitutional qualityEconomic growthARDLNigeria |
| spellingShingle | Fisayo Fagbemi Richard Angelous Kotey Interconnections between governance shortcomings and resource curse in a resource-dependent economy PSU Research Review Natural resource rents Resource curse Institutional quality Economic growth ARDL Nigeria |
| title | Interconnections between governance shortcomings and resource curse in a resource-dependent economy |
| title_full | Interconnections between governance shortcomings and resource curse in a resource-dependent economy |
| title_fullStr | Interconnections between governance shortcomings and resource curse in a resource-dependent economy |
| title_full_unstemmed | Interconnections between governance shortcomings and resource curse in a resource-dependent economy |
| title_short | Interconnections between governance shortcomings and resource curse in a resource-dependent economy |
| title_sort | interconnections between governance shortcomings and resource curse in a resource dependent economy |
| topic | Natural resource rents Resource curse Institutional quality Economic growth ARDL Nigeria |
| url | https://www.emerald.com/insight/content/doi/10.1108/PRR-09-2021-0052/full/pdf |
| work_keys_str_mv | AT fisayofagbemi interconnectionsbetweengovernanceshortcomingsandresourcecurseinaresourcedependenteconomy AT richardangelouskotey interconnectionsbetweengovernanceshortcomingsandresourcecurseinaresourcedependenteconomy |