• Dr. A.S. Ngutsav Benue State University, Makurdi
Keywords: Corruption, Government Expenditure, Economic Growth, VECM and Impulse Response Function.


The paper investigated the effect of corruption and government expenditure on economic growth as well as the pass-through effect of corruption to economic growth through government expenditure in Nigeria between 1981 and 2015. The study made use of the Vector Error Correction Model and Impulse Response Function. Six variables of real gross domestic product (RGDP); corruption perception index (CPI); government expenditure (GOVEXP); index of openness (IOP); inflation rate (INF) and gross fixed capital formation (GFCF) were used for the study. The model variables were tested using the Augmented Dickey Fuller Test and were found stationary at first difference. The study found out that, while corruption has negative effect on economic growth, government expenditure affects economic growth positively. The study also found out that corruption flitters away the gains to the economy due to increase in government expenditure. It therefore recommended that the fight against corruption should be stepped up and policies should be evolved to ensure that all monies expended by the government in the economy are fully tracked and accounted for.

Author Biography

Dr. A.S. Ngutsav, Benue State University, Makurdi

Department of Economics


Abu, N. & Abdulahi, U. (2010). Government expenditure and economic growth in Nigeria, 1970-2008: A Disaggregated Analysis. Business and Economic Journal, 4(3): 237-330.
Ade, A. O., Babatude, H. & Awoniyi, M. A. (2011). The relationship between corruption, foreign direct investment and economic growth in Nigeria. An empirical investigation. Journal of Research in International Business and Management, 1(9): 278-292
Adewale, S. B. (2011). The crowding-out effects of corruption in Nigeria: An empirical study. Journal of Business Management and Economics, 2(2): 059-068
Aidt, T., Dutta, J. & Sena, V. (2007). Governance Regimes, Corruption and Economic Growth: Theory and Evidence. Journal of Comparative Economics, 36(2008): 195 – 220
Akinpelu, S., Ogunseye, U., Bada, I. S. & Agbayangi, A. (2013). The socio- economic determinants of corruption in Nigeria. European Journal of Humanities and Social Sciences, 19(1): 1-17
Barro, R. J. (1990). Government Spending in a Simple Model of Endogeneous Growth. The Journal of Political Economy, 98(5): 103-125.
Dike, V.E (2005). Corruption in Nigeria: A New Paradigm for Effective Control. Africa Economic Analysis. Retrieved on 1st August 2007 from
%20A%20Psychological%20Analysis%20of%20Corruption%20in% 20Nigeria.pdf
Gbosi,A.N. (1998). Banks, Financial Crisis and the Nigerian Economy Today, Corporate Impression Publishers, Owerri.
Keynes, J. M (1936). The General Theory of Employment, Interest and Money. New York: Harcourt Brace Publishers.
Kolawole, A. E. (2015). Impact of Fiscal Policy on Economic Growth in Nigeria (1986-2012) (Unpublished B.Sc. Project). Department of Economics, Faculty of Social Sciences, Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria
Loto, M. A. (2011). Impact of government sectoral expenditure on economic growth. Journal of Economics and International Finance, 3(11): 646- 652.
Muhuda, P. (2013). Investigating the relationship among corruption, Poverty and economic growth in Nigeria. Journal of Banking, 4(2): 15-30
Nurudeen, A. & Usman A. (2010). Government expenditure and economic growth in Nigeria: A disaggregated analysis. Business and Economics Journal, 2010(4): 1-11
Odubunmi, A.S & Agbelade, L.I. (2014). Corruption and Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 5(6): 45-56
Olorunfemi, S. (2008). Public Investment and Economic Growth in Nigeria: An Autoregressive model. Journal of international Finance and Economics.
Rotini, E. M., Obasaju, B., Lawal, A. D. & Ise, O. J. (2013). Analysis of Corruption and Economic Growth in Nigeria. Afro Asian Journal of Social Sciences, 4(2): 1-19
Sahid & Naved (2010). The effects of fiscal policy on economic growth: Enpirical Evidences based on Time series Data from Pakistan. The Pakistan Development Review 49(4): 49-512
Salisu, M. (2000). Corruption in Nigeria. Lancaster University Management School Working paper 2000/006.The LUMS Working Paper s series. Retrieved from:
Tanzi, V. & Davoodi, H. (1997). Corruption, public investment and growth.
International Monetary Fund. Working Paper, No.139
Transparency International-TI (2005). National Integrity Systems. The TI Source Book, Berlin.
World Bank (1997). Report of the Corruption Action Plan Working Group (CAPWG) –Country and International Strategies, OPC Review Draft, May.
World Bank (2015). World Development Indicators.
World Bank (2017). World Bank Atlas.