Fiscal Federalism and the Growth of Nigerian Economy (1980 – 2004)

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Saibu, O.M.
Adedokun, A.S.
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International Journal of Social Sciences
The paper examined the relative effects of State and Federal government share in expenditure and revenue on economic growth in Nigeria with a view to investigating the relevance of fiscal federalism to the overall economic performance in Nigeria using data from 1980 to 2004. Using annual time series data from 1980-2004 a modified Solow’s model was specified and estimated to draw policy inferences The time series properties of the variables were also examined to avoid spurious regression The result showed that there was significant difference in the effects of state government shares and federal government shares on economic growth. Specifically, while state government shares had positive (albeit) insignificant, the federal share had positive and significant effects on economic. The causality test further showed that the sate government fiscal activities were more important than the federal government fiscal More importantly, the result also revealed that the share of the State and local government in the federation account is far less that than the assigned fiscal responsibility. The imbalance has affected the economic development level in Nigeria and this might accounted for the low economic performance experienced over the years despite concerted effort to redress this trend through various economic reforms agenda. The conclusion of the paper is that more fiscal power should be devolved to the state and an effective mechanism should be put in place to ensure that resources are efficiently utilised in all tiers of government without political prejudice
Scholarly articles
Fiscal federalism , Revenue allocation , Economic growth , Research Subject Categories::SOCIAL SCIENCES
Saibu M.O and S.A Adedokun (2010) “Fiscal Federalism and the growth of Nigerian Economy (1980-2004)” International Journal of Social Sciences Volume 2, Number 3 Pp.45-53