article · Journal of Business Development and Management Research
An analysis of Nigerian data from 1984 to 2024 shows that institutional quality significantly advances human capital development over the long run. By evaluating economic variables through an autoregressive distributed lag approach, the research identifies a stable, lasting relationship between governance quality and human capital outcomes. Institutional strength also operates positively in the short run when interacting with public spending. The data reveals that the system corrects back toward long-run equilibrium at a rate of 16.3 per cent each year. As a result of these findings, recommendations focus on reinforcing accountability systems, deepening governance reforms, and scaling up anti-corruption measures. These policy interventions aim to help the state convert public resources into measurable gains in human development more effectively.
Human capital development relies not just on public spending, but on the strength of the institutions managing those funds. These findings show that sound governance, transparent accountability, and anti-corruption efforts are essential prerequisites for ensuring that state investments genuinely translate into long-term improvements in skills, education, and public well-being.
The abstract does not indicate an application pathway, as the research provides macro-level econometric analysis intended for public policy, governance reform, and government spending strategy rather than commercial deployment.
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This study examined the impact of institutional quality on overall human capital development in Nigeria over the period 1984 to 2024. The Autoregressive Distributed Lag (ARDL) bounds testing approach was employed, and complemented by unit root tests, cointegration bounds testing, and post-estimation diagnostics. The unit root results revealed a mixture of I(0) and I(1) variables, justifying the ARDL approach, while the bounds test confirmed a stable long-run relationship among the variables (F-statistic = 4.734, exceeding the upper bound of 3.49). The ARDL results show that institutional quality exerts a positive and statistically significant effect on human capital development both in the long run (coefficient = 0.598, p = 0.017) and through its interaction with government expenditure variables in the short run. The error correction term is negative and significant (–0.163, p < 0.001), confirming convergence to long-run equilibrium at a speed of approximately 16.3 per cent per annum. The study concludes that institutional quality is a critical determinant of human capital accumulation in Nigeria and recommends that government deepen governance reforms, strengthen accountability mechanisms, and intensify anti-corruption measures to improve the conversion of public resources into human capital outcomes.
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DOI: 10.70382/ajbdmr.v13i7.087
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