PUBLIC POLICY, INSTITUTIONAL QUALITY, AND SUSTAINABLE DEVELOPMENT IN NIGERIA

Abstract

Public policy plays a critical role in shaping the socio-economic and environmental conditions of any nation. Sustainable development, which entails achieving economic growth, environmental protection, and social well-being in a balanced manner, remains a fundamental goal of Nigeria’s policy framework. However, the realization of sustainable development is often contingent on the quality of public institutions. This study examined the nexus between public policy, and sustainable development while examining the effect of institutional quality (IQ) as an intervening variable in Nigeria.

The study used a three-layer hierarchical regression to, first, estimate the effect of public policy (PP) on sustainable development (SD), second, examine the effect of PP on IQ and third, investigate the effect of PP on SD when IQ as an intervening variable.

The study found that PP variables including education expenditure (EDUEXP), government budget (GBUDG), and public debt (PUBDBT) all have positive and statistically significant effects on human development (HUDIN) (0.000203’ p = 0.0014; 0.000124, p = 0.0167 and 0.0000274, p = 0.0177 respectively) However, health expenditure (HEAEXP) shows a negative and significant impact on HUDIN (-0.000863, p = 0.0002). None of the variables show a statistically significant impact on government effectiveness (GOEFF). Lastly, when GOEFF was introduced an intervening variable, EDUEXP, GBUDG and PUBDBT continue still have positive and significant effects (0.000178, p = 0.0021; 0.000109, p = 0.0205 and 0.0000257, p = 0.0146 respectively). The effect of HEAEXP also remained negative and significant (-0.039420, p = 0.0265).

The study concluded that public policy, particularly through education expenditure, budget allocation, and managed public debt positively affects sustainable development in Nigeria. However, health expenditure remains problematic and may not currently support development objectives due to inefficiencies. The study therefore recommended that government policy should continue to prioritize sustained funding and reforms in educational infrastructure and access. Further, there is need for accountability, transparency, and targeted investments in the health sector to ensure efficient use of resources, borrowing should be aligned with development priorities and government effectiveness must move beyond procedural efficiency to focus on outcome-driven service delivery.