Human Capital Development Challenge: Why Corruption Eradication is a Panacea in Nigeria

Abstract

The study finds empirical evidence regarding the role of corruption in the development of human capital in Nigeria for 1996–2019 period. Using ARDL technique to examine the long-run and short-run relationship between corruption and human capital development, and VECM to assess the causal effects, the analysis involves the inclusion of two corruption indicators (corruption index and control of corruption) as well as two human capital development measures (human capital index and life expectancy at birth). Findings obtained are consistent with efficiency-reducing theory (corruption is harmful), as the empirical evidence indicates that corruption has a significant impact on human capital development, suggesting that the incidence of corruption is a crucial element in the development of human capital. Further evidence reveals that there exists bidirectional causality between corruption and human capital development, implying that both the level of corruption and human capital development are interlinked and mutually inducing. Hence, the entrenched phenomenon of corruption in the country seems to have presaged long-term poor human development. It is therefore suggested that aside existing institutions established to curb corruption, such policy measures, which include addressing factors that incentivise corruption such as inappropriate regulatory frameworks, rent-seeking dispositions, among others, need to be initiated and promoted.