IMPACT OF CORRUPTION ON FISCAL POLICY MANAGEMENT IN NIGERIA

IMPACT OF CORRUPTION ON FISCAL POLICY MANAGEMENT IN NIGERIA

ABSTRACT

Corruption is an anti-social behaviour conferring improper benefits contrary to legal and moral norms, which undermine the authorities to improve the living conditions of the people. It is one of the greatest challenges of the contemporary world today. The increasing wave of corruption and its devastating impact on the Nigeria economy has become a national problem which has triggered serious research interest within the academics and the industry. This research project therefore is an evaluation of the Impact of Corruption on Fiscal Policy Management in Nigeria. Accordingly, the study explored the extent to which corruption in the fiscal policy management can affect government expenditure, deficit financing and tax revenue. The study adopted ex-post facto research design. It was conducted using 12 year annualized time series data spanning the period, 2000-2011. Data were generated from the Central Bank of Nigeria Statistical Bulletin and Transparency International website. A computer based regression analysis using the Special Package for Social Science (SPSS) computer version was employed to test three formulated hypotheses of the study. Evidence from the descriptive analysis of the research indicated that Nigeria is highly corrupt going by the rating of transparency international. But comparing the transparency initiative rating with the Nigeria fiscal policy parameter, this study concludes that corruption rather has a significant positive effect on overall government expenditure and tax revenue but no significant positive effect on deficit financing in Nigeria. In liner with this conclusions, the researcher recommends amongst others that government leadership should cultivate strong willingness to fight corruption head-on. To achieve this, they should have the political will to prosecute corrupt officers instantly they are caught.