Abstract
Nigeria’s human development dynamics reflect gradual welfare
improvement constrained by institutional fragility, macroeconomic volatility,
uneven social investment, rapid urbanization pressures, demographic
expansion, and persistent governance inefficiencies limiting inclusive and
sustainable development outcomes. This study examines the dynamic
relationship between institutional quality and human development in Nigeria
using annual data from 1995–2024. Employing ARDL bounds testing,
structural break–adjusted unit root analysis, FMOLS/DOLS robustness
estimators, and diagnostic validation, the results confirm a stable long-run
cointegrating relationship between governance indicators and welfare outcomes.
Government effectiveness and corruption control significantly enhance human
development, while political instability exerts a persistent negative influence.
Macroeconomic capacity, health and education spending, trade openness, and
urbanization further reinforce welfare performance, though their effectiveness
depends on institutional quality. Structural break evidence highlights the role of
regime shifts and external shocks in shaping welfare dynamics. The findings
underscore governance reform as a critical policy lever for achieving inclusive
and sustainable human development in Nigeria.