Discriminant Analysis of a Theory on Nigeria Poverty/Corruption Incidence 1999-2015

Rose Mbatomon AKO

Abstract


This paper employs a two-stage analysis to test the efficacy of a quantitative Corruption Index theorized to double as poverty rate in Nigeria. The quantified corruption seems to peak with each democratic election cycle, singly explains 37.9% of variations in real gross domestic product (RGDP) for the economy and is statistically significant at 5 per cent level with expected negative signs. The analysis shows all the predictors are relevant to discriminating between the groups of years where development rates in the Nigerian economy (RGDP) indicate Nigerians are poor, very poor or in abject poverty with expenditure of the national assembly producing highest value F.  62.5% is the overall discriminant model fit and the model excels at identifying group1 (abject poverty) both in the original and cross-validated cases which report 100% correct classification. From the evidence, the dual face of poverty/corruption theorized by this paper for Nigeria may be considered on two fronts: as human beings are both agents and beneficiaries of development, human beings are also both agents and beneficiaries of corruption.  Despite touted growth in the past decade, evidence indicates the well-being of a majority of Nigerians did not improve and we may assume that economic growth is not the only legitimate measure of development for Nigeria and that capturing the aspects of poverty/corruption is important. The theory’s explanation not only works in principle but also meets with some quantitative success and could serve as the basis for further empirical investigations of the corruption/poverty incidence in Nigeria. The paper therefore recommends government minimize general administrative expenditure and the expenditure of the national assembly to boost economic development and reduce the poverty/corruption incidence in Nigeria.


Keywords


Poverty; Corruption; Theory; Public Expenditure; Discriminant Analysis

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DOI: http://dx.doi.org/10.20321/nilejbe.v2i3.64

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