Political Ambiguity and Economic Development: The MENA Countries Pre-Commercial Procurement of Innovation
AbstractIn this paper we provide a coherent framework for analyzing the impact of incalculable political risk, i.e. political ambiguity, on economic development and the choice of development strategy. Using indicators for the levels of internal and external political ambiguity, we analyze the growth paths of MENA countries based on annual data for the period from 1980 to 2008. Succession rules for governments are our indicator for internal political ambiguity, the potential for becoming involved in disruptive international conflicts serves as an indicator for external political ambiguity. Our results show that political ambiguity has a negative impact on both the level of per capita GDP and its growth. Our theoretical model suggests that political ambiguity biases development strategies, leading to an underinvestment in intensive sources of growth.
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Bibliographic InfoPaper provided by Maastricht School of Management in its series Working Papers with number 2012/39.
Length: 40 pages
Date of creation: Oct 2012
Date of revision:
economic development; decision making; ambiguity; development strategy; political economy; Middle East and North Africa;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-27 (All new papers)
- NEP-ARA-2012-10-27 (MENA - Middle East & North Africa)
- NEP-POL-2012-10-27 (Positive Political Economics)
- NEP-UPT-2012-10-27 (Utility Models & Prospect Theory)
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