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Political Instability and Economic Growth: Evidence from Jordan

Author

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  • Sweidan Osama D.

    (College of Business and Economics, Department of Economics and Finance, United Arab Emirates University, P.O. Box 15551, Al-Ain, UAE)

Abstract

This paper explores the link between political instability and economic growth in Jordan, which is a lower middle-income country located at the heart of the Middle East. Historically, this region has been living under protracted wars, clashes, violence and terrorist attacks. We can expect these events to influence economic growth via their effect on government spending. We employ two econometric techniques: ARDL model (OLS) and Kalman filter (ML) and use data over the period 1967–2009. We find political instability has a statistically significant negative effect on economic growth as well as on real government expenditures.

Suggested Citation

  • Sweidan Osama D., 2016. "Political Instability and Economic Growth: Evidence from Jordan," Review of Middle East Economics and Finance, De Gruyter, vol. 12(3), pages 279-300, December.
    • Handle: RePEc:bpj:rmeecf:v:12:y:2016:i:3:p:279-300:n:1
    DOI: 10.1515/rmeef-2015-0025
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    More about this item

    Keywords

    political instability; growth rate of real income per capita; real government spending; Jordan; ordinary least squares; Kalman filter;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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