The State, Globalization and Development: The Case Study of Nigeria

Abstract

This paper examined the influence of globalization (economic, political, and social) on economic development of Nigeria. The Konjunkturforschungsstelle (KOF)globalization index was utilized to capture globalization while the growth rate of per capita income was a proxy for development. Time series data covering the period 1970 to 2017 were used in the course of this study. The data were analysed using Ordinary Least Squares, unit root test, cointegration test, vector error correction mechanism, impulse response function, and variance decomposition. The unit root test revealed that the variables were stationary at mixed order, and the Johansen cointegration test and error correction mechanism showed that there is a long run equilibrium relationship between globalization and development. The vector correction mechanism revealed that 42.4% of the short run distortions is corrected annually. In the short run, economic globalization exerts a negative and significant effect on the growth rate of per capita income; while both political and social globalizations exert no significant short run effect on development in the short run. In the long run, economic globalization exerted a negative and significant effect on development; political globalization posed a positive and significant effect on development; while social globalization exerted a negative and significant effect on development. the paper concluded by stating that though globalization maybe harmful in some extent, the positive effect of the concept is duly felt in almost all aspect of human lives.