Nexus of Fiscal Instability and Developmental Outcomes in Nigeria

This paper examines the effect of fiscal instability component on fluctuation in welfare indicator for 45 years. Descriptive statistics reveals that and real GDP per capital are largely unstable Hodrick-Prescott filter (HPF) is employed as a smoothing measure long-term component. lesser government revenue had been committed to development purposes compared with recurrent expenditure since beginning fourth republic Nigeria. Using ARDL model, study found that, there exist long-run association among variable interest one percent increase rate led an approximate 30% reduction while 36% capital. In short-run however, 1% immediate lagged value cyclical significantly current index by 54% but such reduced 43% two-year lagged. Also, 21% only 9% was off set The therefore, recommended greater control components through diversification base should be emphasized other stabilize long-run.