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Who is afraid of political instability?

  • Campos, Nauro F.
  • Nugent, Jeffrey B.

An unstable macroeconomic environment is often regarded as detrimental to economic growth. Among the sources contributing to such instability, the literature has assigned most of the blame to political issues. This paper empirically tests for a causal and negative long-term relationship between political instability and economic growth, but finds no evidence of such a relationship. Sensitivity analysis indicates that there is a contemporaneous negative relationship and that, in the long run and ignoring institutional factors, the Sub-Saharan Africa group plays the determining role in steering this relationship into becoming causal and negative.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 67 (2002)
Issue (Month): 1 (February)
Pages: 157-172

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Handle: RePEc:eee:deveco:v:67:y:2002:i:1:p:157-172
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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