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Political Ambiguity and Economic Development: The MENA Countries Pre-Commercial Procurement of Innovation

Author

Listed:
  • Juliane Brach

    (The Knowledge Company, Germany and Maastricht School of Management, The Netherlands, Contact: jbrach@knowledgecompany.eu)

  • Willem Spanjers

    (Kingston University, United Kingdom and Rimini Center for Economic Analysis, Italy. Contact: w.spanjers@kingston.ac.uk)

Abstract

In 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.

Suggested Citation

  • Juliane Brach & Willem Spanjers, 2012. "Political Ambiguity and Economic Development: The MENA Countries Pre-Commercial Procurement of Innovation," Working Papers 2012/39, Maastricht School of Management.
  • Handle: RePEc:msm:wpaper:2012/39
    as

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    File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-39.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
    1. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    2. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 51(2), pages 209-223.
    3. Chateauneuf, Alain & Eichberger, Jurgen & Grant, Simon, 2007. "Choice under uncertainty with the best and worst in mind: Neo-additive capacities," Journal of Economic Theory, Elsevier, vol. 137(1), pages 538-567, November.
    4. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June.
    5. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, Elsevier.
    6. Jürgen Eichberger & David Kelsey, 1999. "E-Capacities and the Ellsberg Paradox," Theory and Decision, Springer, vol. 46(2), pages 107-138, April.
    7. Freeman, Christopher & Soete, Luc, 2009. "Developing science, technology and innovation indicators: What we can learn from the past," Research Policy, Elsevier, vol. 38(4), pages 583-589, May.
    8. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    economic development; decision making; ambiguity; development strategy; political economy; Middle East and North Africa;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O53 - Economic Development, Innovation, 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

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