This study examined the moderating effect of institutional quality on the foreign aid-economic growth nexus in Nigeria from 1984 to 2018 through the use of Johansen and canonical cointegration regression. Findings from the study indicate that while foreign aid has a separate positive effect on economic growth, the quality of institutions in the country diminishes and leaks out this positive effect. To this end, fiscal authorities in Nigeria need to review the existing institutional framework guiding the sourcing, disbursement and utilization of foreign aid with a view to detecting any loopholes and lapses that encourage diversion of fund and institutionalized corruption which prevent it from promoting growth.
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