IDEAS home Printed from https://ideas.repec.org/a/eee/wodepe/v36y2024ics2452292924000626.html
   My bibliography  Save this article

Against Democracy, Neo-totalitarianism, or What? A Cross-Country Dynamic Panel Endogenous Switching Regressing Analysis of Innovation, Economic Growth, and Political Stability

Author

Listed:
  • Frimpong, Stephen

Abstract

Innovation has long been recognized in economic literature as an important source of Schumpeterian disequilibrium for societies’ economic development, but until now, it has played no role in the debate on the political stability of countries regarding its disequilibrating and destabilization role between societal demands and government capabilities. Thus, the extent to which a country’s level of innovation disequilibrates public demands and government capabilities and leads to adverse impacts on political stability has been neglected in the literature. This paper analyzes the effects of innovation on the political stability of countries using 2013–2020 panel data for 121 countries from the World Bank and the World Intellectual Property Organization in static and dynamic simulation frameworks. The paper uses panel endogenous switching regression with control function, the robust Arellano-Bover/Blundell-Bond system dynamic panel model, and other techniques that have never been used before in this subject matter to disentangle the effects of innovation on political stability. The dependent variable is an index measuring political stability, and the explanatory variable indicates a country’s level of innovation. Controls include the country’s institutional, socioeconomic, and environmental factors. Endogeneity is controlled using a combination of traditional instrumental variables, lag variables in dynamic systems, and endogenous treatment models. The findings are that the recent rapid rise and proliferation of innovation negatively correlate with political stability, especially in countries with high levels of innovation production. On average, rising levels of uncontrolled innovation reduce political stability by 48 percent in high-innovation-producing countries relative to low-innovation-producing countries. High institutional quality factors, such as improvement in voice and accountability and the rule of law, moderate the negative relationship between innovation and political stability. The findings confirm the relevance of other-disregarded factors in sustaining and improving political stability and reinforce the importance and urgent need for enhanced regulatory mechanisms for the production, dissemination, and use of innovation.

Suggested Citation

  • Frimpong, Stephen, 2024. "Against Democracy, Neo-totalitarianism, or What? A Cross-Country Dynamic Panel Endogenous Switching Regressing Analysis of Innovation, Economic Growth, and Political Stability," World Development Perspectives, Elsevier, vol. 36(C).
  • Handle: RePEc:eee:wodepe:v:36:y:2024:i:c:s2452292924000626
    DOI: 10.1016/j.wdp.2024.100625
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2452292924000626
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.wdp.2024.100625?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wodepe:v:36:y:2024:i:c:s2452292924000626. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/world-development-perspectives .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.