Political and economic determinants of private investment
AbstractThis paper presents empirical evidence that links private investment to rate of return differential, risk aversion, and several types of political and economic risk. Estimating private investment equation for a panel of 25 developing countries over 21 years yields the following results: (i) socio-political instability characterized by nonviolent protests promotes private investment while violent uprisings hinder private investment; (ii) regime change instability characterized by constitutional government change promotes private investment while unconstitutional government change hinders private investment; and (iii) policy uncertainty characterized by variability of contract enforcement rights promotes private investment while variability of government political capacity hinders private investment. Copyright © 2004 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.
Volume (Year): 16 (2004)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/journal/5102/home
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Quan Le & Paul J. Zak, 2001. "Political Risk and Capital Flight," Claremont Colleges Working Papers 2001-10, Claremont Colleges.
- Campos, Nauro F, 2000.
"Who is Afraid of Political Instability?,"
CEPR Discussion Papers
2555, C.E.P.R. Discussion Papers.
- Nauro F. Campos & Jeffrey B. Nugent, 2000. "Who is Afraid of Political Instability?," William Davidson Institute Working Papers Series 326, William Davidson Institute at the University of Michigan.
- Nauro F. Campos & Jeffrey B. Nugent, 2001. "Who Is Afraid Of Political Instability?," Development and Comp Systems 0012016, EconWPA.
- Chetan Ghate & Quan Vu Le & Paul J. Zak, 2003.
"Optimal Fiscal Policy in an Economy Facing Sociopolitical Instability,"
Review of Development Economics,
Wiley Blackwell, vol. 7(4), pages 583-598, November.
- Chetan Ghate & Quan Vu Le & Paul J. Zak, 2002. "Optimal Fiscal Policy in an Economy Facing Socio-Political Instability," Discussion Papers of DIW Berlin 308, DIW Berlin, German Institute for Economic Research.
- Dani Rodrik, 1989.
"Policy Uncertainty and Private Investment in Developing Countries,"
NBER Working Papers
2999, National Bureau of Economic Research, Inc.
- Rodrik, Dani, 1991. "Policy uncertainty and private investment in developing countries," Journal of Development Economics, Elsevier, vol. 36(2), pages 229-242, October.
- Pastor, Manuel Jr. & Hilt, Eric, 1993. "Private investment and democracy in Latin America," World Development, Elsevier, vol. 21(4), pages 489-507, April.
- Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
- Fedderke, Johannes & Klitgaard, Robert, 1998. "Economic Growth and Social Indicators: An Exploratory Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 46(3), pages 455-89, April.
- Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996.
"Political Instability and Economic Growth,"
4553024, Harvard University Department of Economics.
- Aizenman, Joshua & Marion, Nancy P. & Marion, Nancy P., 1993. "Macroeconomic uncertainty and private investment," Economics Letters, Elsevier, vol. 41(2), pages 207-210.
- Alesina, Alberto, et al, 1996.
" Political Instability and Economic Growth,"
Journal of Economic Growth,
Springer, vol. 1(2), pages 189-211, June.
- Ahmet Faruk Aysan & M.-K. Nabli & Marie-Ange Veganzones, 2011.
"Governance and Private Investment in the Middle East and North Africa,"
- Aysan, Ahmet Faruk & Nabli, Mustapha Kamel & Veganzones-Varoudakis, Marie-Ange, 2006. "Governance and private investment in the Middle East and North Africa," Policy Research Working Paper Series 3934, The World Bank.
- Marie-Ange VEGANZONES-VAROUDAKIS & NABLI & Ahmet Faruk AYSAN, 2006. "Governance and Private Investment in the Middle East and North Africa," Working Papers 200627, CERDI.
- Ahmet Faruk AYSAN & Mustapha Kamel NABLI & Marie-Ange VÉGANZON�S-VAROUDAKIS, 2007.
"Governance Institutions And Private Investment: An Application To The Middle East And North Africa,"
The Developing Economies,
Institute of Developing Economies, vol. 45(3), pages 339-377.
- Ahmet Faruk Aysan & M. K. Nabli & M-A Veganzones-Varoudakis, 2006. "Governance Institutions and Private Investment: An Application to the Middle East and North Africa," Working Papers 2006/08, Bogazici University, Department of Economics.
- van der Ploeg, Frederick & Rohner, Dominic, 2012.
"War and natural resource exploitation,"
European Economic Review,
Elsevier, vol. 56(8), pages 1714-1729.
- Frederick Van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," CESifo Working Paper Series 3244, CESifo Group Munich.
- Rick van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," OxCarre Working Papers 042, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- Frederick van der Ploeg & Dominic Rohner, 2010. "War and natural resource exploitation," IEW - Working Papers 481, Institute for Empirical Research in Economics - University of Zurich.
- Rafael Alexis Acevedo Rueda & José U. Mora Mora, 2008. "Sociopolitical and judicial factors as determinants of private investment in Latin America," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 33(26), pages 93-118, july-dece.
- Mustapha Kamel Nabli, 2007. "Breaking the Barriers to Higher Economic Growth : Better Governance and Deeper Reforms in the Middle East and North Africa," World Bank Publications, The World Bank, number 6914, March.
- Ahmet Faruk Aysan & Zeynep Ersoy & M-A Veganzones-Varoudakis, 2007. "Does the Perception of Governance Institutions Matter for Private Investment: The Case of Middle East and North Africa," Working Papers 2007/03, Bogazici University, Department of Economics.
- Dearmon, Jacob & Grier, Robin, 2011. "Trust and the accumulation of physical and human capital," European Journal of Political Economy, Elsevier, vol. 27(3), pages 507-519, September.
- Ahmet Faruk Aysan & M-A Veganzones-Varoudakis, 2007. "How Do Political and Governance Institutions Affect Private Investment Decisions? An Application to the Middle East and North Africa," Working Papers 2007/05, Bogazici University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.