Current Volume 9
Abstract
The study examined the relationship between institutional quality and poverty reduction in Nigeria from 1990 to 2024. Poverty headcount is the predicted in the study, while the predictors included institutional quality, gross domestic product per capita and unemployment rate. However, institutional quality was estimated as a single composite index using the Worldwide Governance Indicators (WGI) components from its six dimensions – voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption. Data for the study were culled from the publications and reports from Worldwide Governance Indicators (WGI), World Bank (WDI), International Monetary Fund (IMF), and National Bureau of Statistics. The error correction model (ECM) diagnostics was employed in the data analysis having established a long run relationship among the variables from the Johansen-Hendry-Juselius Cointegration Test. The short-run results reveal that institutional quality and GDP per capita significantly reduce poverty in Nigeria, while unemployment and past poverty changes exert no meaningful effect. The negative and significant error correction term confirms the existence of a stable long-run equilibrium relationship among the variables, with nearly half of deviations corrected annually. Hence, this study recommends that to effectively reduce poverty in Nigeria, policies should focus on strengthening institutional quality, ensuring transparency, and promoting inclusive, broad-based economic growth that creates productive and well-paying jobs. In addition, consistent and long-term policy reforms are essential to sustain poverty reduction and maintain macroeconomic stability.
Keywords
Poverty Headcount, Institutional Quality, GDPPC, Unemployment
Citations
IRE Journals:
Nwaru, Ndubuisi Mercilinus, Ogu, Callistus, Azuike Anne Urenna "Institutional Quality and Poverty Reduction in Nigeria" Iconic Research And Engineering Journals Volume 9 Issue 11 2026 Page 4871-4884 https://doi.org/10.64388/IREV9I11-1718097
IEEE:
Nwaru, Ndubuisi Mercilinus, Ogu, Callistus, Azuike Anne Urenna
"Institutional Quality and Poverty Reduction in Nigeria" Iconic Research And Engineering Journals, 9(11) https://doi.org/10.64388/IREV9I11-1718097
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