How Does Political Instability Affect Economic Growth?

How Does Political Instability Affect Economic Growth?
Author: Mr.Ari Aisen
Publisher: International Monetary Fund
Total Pages: 30
Release: 2011-01-01
Genre: Business & Economics
ISBN: 1455211907

The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.

The Political Dimension of Economic Growth

The Political Dimension of Economic Growth
Author: Silvio Borner
Publisher: Springer
Total Pages: 403
Release: 1998-04-12
Genre: Political Science
ISBN: 1349262846

The state and its institutions are crucial for economic development: for better and for worse. This insight informs this important, up-to-date and authoritative survey of new trends in growth economics and the widely divergent economic performance of developing countries - for example, between Latin America and South-east Asia - which seemed to be similarly placed just a generation ago. The decisive role of the political dimension in economic growth seems clear but there are many challenges to be met in getting an analytical handle on the precise determinants and in testing empirically for this. This is the challenge taken up by the international team of contributors.

Democracy, Governance, and Economic Performance

Democracy, Governance, and Economic Performance
Author: Yi Feng
Publisher: MIT Press
Total Pages: 408
Release: 2003
Genre: Business & Economics
ISBN: 9780262562119

A theoretical and empirical examination of why political institutions and organizations matter in economic growth.

The Politics of Property Rights

The Politics of Property Rights
Author: Stephen Haber
Publisher: Cambridge University Press
Total Pages: 420
Release: 2003-05-26
Genre: Business & Economics
ISBN: 9780521820677

This book addresses a puzzle in political economy: why is it that political instability does not necessarily translate into economic stagnation or collapse? In order to address this puzzle, it advances a theory about property rights systems in many less developed countries. In this theory, governments do not have to enforce property rights as a public good. Instead, they may enforce property rights selectively (as a private good), and share the resulting rents with the group of asset holders who are integrated into the government. Focusing on Mexico, this book explains how the property rights system was constructed during the Porfirio Díaz dictatorship (1876-1911) and then explores how this property rights system either survived, or was reconstructed. The result is an analytic economic history of Mexico under both stability and instability, and a generalizable framework about the interaction of political and economic institutions.

Marketing Sovereign Promises

Marketing Sovereign Promises
Author: Gary W. Cox
Publisher: Cambridge University Press
Total Pages: 237
Release: 2016-05-09
Genre: Business & Economics
ISBN: 1107140625

This book offers a new theory of state growth, based on the creation of credible and prudent state budgets.

China's Crisis of Success

China's Crisis of Success
Author: William H. Overholt
Publisher: Cambridge University Press
Total Pages: 306
Release: 2018-01-11
Genre: Political Science
ISBN: 1108389783

China's Crisis of Success provides new perspectives on China's rise to superpower status, showing that China has reached a threshold where success has eliminated the conditions that enabled miraculous growth. Continued success requires re-invention of its economy and politics. The old economic strategy based on exports and infrastructure now piles up debt without producing sustainable economic growth, and Chinese society now resists the disruptive change that enabled earlier reforms. While China's leadership has produced a strategy for successful economic transition, it is struggling to manage the politics of implementing that strategy. After analysing the economics of growth, William H. Overholt explores critical social issues of the transition, notably inequality, corruption, environmental degradation, and globalisation. He argues that Xi Jinping is pursuing the riskiest political strategy of any important national leader. Alternative outcomes include continued impressive growth and political stability, Japanese-style stagnation, and a major political-economic crisis.

The Dynamic Effect of Social and Political Instability on Output

The Dynamic Effect of Social and Political Instability on Output
Author: Mr.Lorenzo E. Bernal-Verdugo
Publisher: International Monetary Fund
Total Pages: 41
Release: 2013-04-23
Genre: Business & Economics
ISBN: 1484339266

The aim of this paper is to analyze the dynamic effect of social and political instability on output. Using a panel of up to 183 countries from 1980 to 2010, the results of the paper suggest that social conflicts have a significant and negative impact on output in the short-term with the magnitude of the effect being a function of the intensity of political instability. The results also show that the recovery of output over the medium-term depends on the ability of the country to implement, in the aftermath of a social instability episode, reforms aimed at improving the level of governance. The results are robust to different checks and estimation strategies.

Coalition Politics and Economic Development

Coalition Politics and Economic Development
Author: Irfan Nooruddin
Publisher: Cambridge University Press
Total Pages: 267
Release: 2010-12-02
Genre: Political Science
ISBN: 1139494023

Coalition Politics and Economic Development challenges the conventional wisdom that coalition government hinders necessary policy reform in developing countries. Irfan Nooruddin presents a fresh theory that institutionalized gridlock, by reducing policy volatility and stabilizing investor expectations, is actually good for economic growth. Successful national economic performance, he argues, is the consequence of having the right configuration of national political institutions. Countries in which leaders must compromise to form policy are better able to commit credibly to investors and therefore enjoy higher and more stable rates of economic development. Quantitative analysis of business surveys and national economic data together with historical case studies of five countries provide evidence for these claims. This is an original analysis of the relationship between political institutions and national economic performance in the developing world and will appeal to scholars and advanced students of political economy, economic development and comparative politics.

Impacts of Political Instability on Economics in the MENA Region

Impacts of Political Instability on Economics in the MENA Region
Author: Philippe Zgheib
Publisher: Information Science Reference
Total Pages: 0
Release: 2019
Genre: Business & Economics
ISBN: 9781522582496

Political instability can harm economic performance and is likely to shorten policymakers' horizons, leading to sub-optimal short-term macroeconomic policies. This instability can also lead to a more frequent switch of policies, creating volatility and negatively affecting macroeconomic performance. Impacts of Political Instability on Economics in the MENA Region explores the results of financing challenges and strategies surrounding political unrest that center around the MENA region, as well as opportunities these challenges create for businesses and governments. Featuring research on topics such as debt, macroeconomics, and economic reform, this book is ideally designed for economists, investors, managers, multinational companies, policymakers, government officials, academicians, researchers, and advanced-level students furthering their research exposure to economic instability in the world today.