This study investigates the impact of corruption perception and political stability on sustainable economic growth in Niger. Utilizing country-level data spanning 2000-2022, robust statistical techniques, including Robust Least Squares (RLS) and Fully Modified OLS (FMOLS), are employed. Contrary to conventional expectations, the findings indicate that higher corruption perception positively influences sustainable economic growth. Political stability consistently demonstrated a negative relationship with sustainable economic growth, contesting the orthodox wisdom that greater political stability fosters increased economic development. Furthermore, the results show that trade openness and inflation negatively drive sustainable growth with stronger evidence from FMOLS analysis. The study discusses some recommendations based on the findings.
TopIntroduction
Economic growth has consistently been shown to be negatively impacted by political instability and corruption (Kaplan, 2017). However, the relationship between corruption and growth is nuanced; corruption can promote growth by lowering government consumption and boosting trade openness. Still, it can also impede growth due to its negative impacts on investment and political stability (Hodge, 2011). Political stability plays a crucial role, as it has the power to either mitigate or exacerbate the detrimental consequences of corruption on economic growth (Shabbir, 2016). Moreover, there is a nonlinear relationship between corruption and growth, with a decrease in corruption translating into an increase in economic growth in the form of an inverted U-shaped curve (Ahmad, 2012). Since gaining independence, Niger has faced various development obstacles, including political, economic challenges, severe droughts, and corruption. All these variables have had a detrimental impact on Niger's socio-economic development. According to the latest Human Development Index, the country is ranked second to last (HDI Report, 2022). Additionally, Niger experiences chronic instability due to both the political situation and rebellions. For instance, from independence to the present day, Niger has witnessed five coups d'état, the most recent occurring on 26 July 2023, and two armed rebellions in the north. Since 2015, Niger has grappled with another form of instability linked to terrorism in its southeastern and western regions. From the national conference to the present day, corruption has become widespread in Niger, as evidenced by various reports of the Corruption Perceptions Index published by Transparency International. Social ethics play a significant role in all civilizations, and corruption remains a major concern. Despite studies demonstrating that corruption harms an economy (Gyimah-Brempong, 2002), some authors argue that high levels of corruption have not prevented economic growth in many Southeast Asian countries, particularly China (Leff, 1964; Huntington, 1968).
Despite the extensive research on the relationship between corruption, political stability, and economic development worldwide, to the best of my knowledge, there is only one contribution on this intriguing topic related to Niger. Moreover, the author did not consider corruption as a variable that may have an impact on growth in the case of Niger. Hence, the primary objective of this study is to examine the roles of corruption and political stability in sustainable economic growth in Niger.
The rest of the paper is organized as follows: Section two provides a historical account of political instability in Niger before and after the 1990s. Section three highlights relevant literature. Section four describes and presents the econometric model, while section five presents and discusses the results. Finally, section six concludes the paper.