Essays on institutional evolution and economic development: evidence from Nigeria

Fadiran, David Oluwatosin

Essays on institutional evolution and economic development: evidence from Nigeria

Doctoral Thesis

2015

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

The important role of institutions is relatively agreed on within the growth literature, with most empirical evidence pointing towards a positive influence of institutions on economic growth. However, empirical analysis of the institutions and growth nexus have faced a few problems, which include: the lack of a clear distinction between the different types of institutions; (i.e. political institutions, economic institutions, and customary institutions); a lack of long-run data measuring institutions for most of sub-Saharan Africa; and the paucity of country specific studies - the majority of the empirical evidence have mainly focused on cross-country analysis. While extensions from cross-country analysis to country specific analysis is growing, empirical studies focused on sub-Saharan Africa remain limited. Within the African context, majority of empirical evidence suggest weak institutions as one of the main causes of its poor economic performance. However, due to the paucity of long-run data on institutions, such an hypothesis has not been empirically tested for specific countries. Motivated by these gaps, this thesis contains three essays that examine three types of institutions and their impact on the economy. The specific issues focused on include: the evolution of institutions; persistence of institutions; interdependence between political and economic institutions; interdependence between institutions and economic development; and the role of institutions in determining resource wealth effects. This thesis uses Nigeria as a case study, because of its standing as one of the larger economies in sub-Saharan Africa, especially in terms of its natural resources. In addition to this, Nigeria has experienced numerous regime and constitutional changes over the past few decades which may lead to interesting institutional dynamics.