REGIME TYPES AND ECONOMIC PERFORMANCE IN NIGERIA, 1966-2015

Abstract

The impact of regime types (democracy and dictatorship) on economic performance has continued to be a major controversy in political economy. Previous studies on regime types and economic performance were cross national and did not include contemporary economic performance indicators. Although the question of how political regimes have impacted economic performance was discussed, they have not been exhaustively empirically investigated in Nigeria. This study was therefore designed to empirically investigate the impact of political regimes on economic performance and the factors that account for the differential impact in Nigeria from 1966-2015. The study was guided by Growth and Structural Factor Theory and it adopted comparative research design. Economic performance was assessed for the distinct regime types- dictatorship (military) and democratic. Military regime occurred 1966-1979 and 1983-1999, although interrupted by an interim national government for about three months, while the democratic regimes spanned 1979-1983 and 2000-2015. The economic performance indicators explored included economic growth rate, capital formation, inflation rate, interest rate, exchange rate (N/US$), unemployment rate, life expectancy and trade balances. Data were sourced from the Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics Annual Abstract of Statistics for the periods covered. Performances by the two regimes types were averaged for each indicator and compared. Data were analysed using t-test at p≤0.05. The average of the indicators under military regime were: economic growth rate ((x ) ̅ = 4.4% ±7.092297), inflation rate ((x ) ̅= 27.3% ±21.13912), capital formation ((x ) ̅ = 52314.68Nb ± 61977.80), exchange rate ((x ) ̅ =9.5 ±9.303599) N/USD, interest rate ((x ) ̅ = 15.7% ±7.409205), unemployment rate ((x ) ̅ = 3.3% ±1.947), trade balance ((x ) ̅ =72.3Nm ± 127.6335) and life expectancy ((x ) ̅ = 46.6yrs ±1.288293). For democratic regime, they were: economic growth rate ((x ) ̅ = 5.0% ±6.071766), inflation rate ((x ) ̅=12.3% ±4.719680), capital formation ((x ) ̅ =26841.70Nb ±2.772914), exchange rate ((x ) ̅ = 106.6 N/USD ±64.02058), interest rate ((x ) ̅ = 16.2% ±4.802802) unemployment rate ((x ) ̅ = 13.6% ±7.6336), trade balance ((x ) ̅ = 3780.857Nm ± 4175.521) and life expectancy ((x ) ̅= 49.4yrs ± 2.556885). The t-test results were: exchange rate (t = 7.748), trade balance (t = 4.313), inflation rate (t = 2.701), life expectancy (t = 8.263) and unemployment rate (t = 6.698). The military regime performed better in terms of the economic indicators with high statistical difference in exchange rate, trade balance, inflation and unemployment rate, while the democratic regime performed better in life expectancy. Thus, the results were mixed across indicators. However, the military regime did better than the democratic regime in overall economic performance. Economic performance is not a function of regime type, but of the political will of the leaders to engage in strategies that improve the economy and livelihood of the populace. Responsible leaders with commitment to democratic values and ethos are required to accelerate effective performance in those indicators that the military regime outperformed democratic ones in Nigeria.