Capital Flows and Economic Growth: Does the Role of State Fragility Really Matter for Sustainability?

Fragile states pose a dilemma for the development community at research, policy and practice levels. These countries present not only some of the most serious and urgent development needs in the world, but, the most difficult environments for conventional economic theories and assumptions. Recent periods has however witnessed growth in a significant number of these countries. This raises the concern of what drives the witnessed growth, and whether the manifestations of state fragility have implications for a fragile state. Interestingly, quite a lot of the existing models on economic growth (as an area of academic research) tend to be sightless of state fragility. This study therefore seeks to understand the significance of state fragility for economic growth, using Nigeria as a case. The study objective is achieved by introducing state fragility into a simple economic growth model and subjected to econometric time-series testing. The results are therefore presented in the paper and discussed in line with sustainable development.