Impact of Social Capital on Economic Growth in Nigeria: 1995-2022

Abstract

This research paper delves into the intricate relationship between “trust” and “association membership “as components of social capital on economic growth using panel data spanning the years 1995 to 2022. We used the dynamic panel ARDL to unveil both the long-term and short-term dynamics between these variables. According to the study's findings, there is a noteworthy absence of a long-run relationship between social capital and economic growth. Surprisingly, this outcome holds consistent across the diverse sample of member countries. As a result, this study firmly concludes that social capital does not exert significant influence on economic growth in both short-run and the long run. Subsequently, the paper put forth the following suggestions: Governments should prioritize the development of social capital as a central policy objective. This strategic focus will improve investor confidence and civic trust, which will improve the country's economic prospects .Secondly, states should leverage their inherent growth potentials, which will undoubtedly increase social capital fostering a positive cycle of growth and societal cohesion.