On the measurement of political instability and its impact on economic growth

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Abstract

We examine the multidimensionality of political instability using 25 political instability indicators in an Exploratory Factor Analysis. We find that political instability has four dimensions: politically motivated violence, mass civil protest. instability within the political regime. and instability of the political regime. We examine the causal impact of political instability on economic growth using a dynamic panel system Generalized Method of Moments model and find that the four dimensions of political instability have different effects on economic growth. Only the instability of the political regime has a robust and significant negative effect on economic growth. (C) 2008 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)15-29
Number of pages15
JournalEuropean Journal of Political Economy
Volume25
Issue number1
DOIs
Publication statusPublished - Mar-2009

Keywords

  • Political instability
  • Factor analysis
  • Economic growth
  • CONFLICT BEHAVIOR
  • INSTITUTIONS
  • DIMENSIONS
  • EMPIRICS
  • DATASET
  • NATIONS
  • NUMBER
  • MODELS

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