Who is Afraid of Political Instability?

Nauro Campos and Jeffrey Nugent

No 2555, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: Economic growth; Political instability (search for similar items in EconPapers)
JEL-codes: D72 E23 O40 (search for similar items in EconPapers)
Date: 2000-09
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Who is afraid of political instability? (2002)
Working Paper: WHO IS AFRAID OF POLITICAL INSTABILITY? (2001)
Working Paper: Who is Afraid of Political Instability? (2000)
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