THE RELATIONSHIP BETWEEN POLITICAL INSTABILITY AND ECONOMIC GROWTH: PANEL CAUSALITY ANALYSIS FOR MENA COUNTRIES

Year 2018, Prof. Dr. Harun TERZI Special Issue, 271 - 286, 19.09.2018

İbrahim Al , Murat Belke

https://doi.org/10.18092/ulikidince.452539

Cited By: 3

Abstract

There
is a strong and bilateral relationship between the economy and politics. Therefore,
political variables are often included when analyzing economic performance. One
of the most important political variables is political instability. If an
assessment is made in terms of political instability, it is seen that one of
the most unstable region in the world is the MENA region. When considering the
volume of oil reserves and the amount of production that they have, the
political instability in the region is also a big issue for the world economy. The
aim of this study is to investigate the causality relationship between
political instability and economic growth in MENA countries. For this purpose,
a survey covering the 1991-2016 periods was conducted for 14 selected MENA
countries. In the study, Internal and external conflict indices published by
the ICRG.as a political instability indicator were preferred and bootstrapped
panel Granger causality test developed by Kónya (2006) was used. According to
the findings, except for Iran and Israel, there are single and twofold causal
relationships among the variables.

Keywords

Political Instability, Economic Growth, Panel Causality, MENA

POLİTİK İSTİKRARSIZLIK İLE EKONOMİK BÜYÜME ARASINDAKİ İLİŞKİ: MENA ÜLKELERİ İÇİN PANEL NEDENSELLİK ANALİZİ

Abstract

Ekonomi ile politika
arasında kuvvetli ve karşılıklı bir ilişki mevcuttur. Dolayısıyla, ekonomik
performans araştırılırken genellikle politik değişkenler de analize dâhil
edilmektedir. En önemli politik değişkenlerden biri ise politik
istikrarsızlıktır. Politik istikrarsızlıklar açısından bir değerlendirme yapılırsa,
dünyadaki en istikrarsız bölgelerden birinin MENA bölgesi olduğu görülmektedir.
Sahip olduğu petrol rezerv hacmi ve üretim miktarı dikkate alındığında, söz
konusu bölgedeki politik istikrarsızlıkların dünya ekonomisi açısından da önemi
büyüktür. Bu çalışmanın amacı, politik istikrarsızlık ile ekonomik büyüme
arasındaki nedensellik ilişkisini, MENA ülkeleri açısından araştırmaktır. Bu
amaçla, seçilmiş 14 MENA ülkesi için 1991-2016 dönemini kapsayan bir araştırma
yürütülmüştür. Politik istikrarsızlık göstergesi olarak ICRG tarafından
yayımlanan iç ve dış karışıklık endekslerinin tercih edildiği araştırmada, Kónya (2006) tarafından geliştirilen bootstrap
panel Granger nedensellik testi kullanılmıştır. Elde edilen bulgulara
göre, İran ve İsrail hariç, diğer ülkelerde söz konusu değişkenler arasında tek
ve çift yönlü nedensellik ilişkileri mevcuttur. 

Keywords

Politik İstikrarsızlık, Ekonomik Büyüme, Panel Nedensellik, MENA

References

• Referans 1: Abadie A. ve Gardeazabal, J. (2001), The Economic Cost of Conflict: A Case-Control Study for the Bask Country. NBER Working Paper Series. 8478, 1-32.
• Referans 2: Abdiweli, M. A. (2001). Political Instability, Political Uncertainty, and Economic Growth: An Emprical Investigation, Atlantic Economic Journal, 29(1), 87-106.
• Referans 3: Aisen, A. ve Veiga F. J. (2011). How Does Political Instability Affect Economic Growth?. IMF Working Paper. 11(12), 1-28.
• Referans 4: Alesina, A., Özler, S., Roubini, N. ve Swagel, P. (1992). Political Instability and Economic Growth. NBER Working Paper Series. 4173, 1-47.
• Referans 5: Alesina A. ve Perotti, R. (1993). Income Distribution, Political Instability, and Investment. NBER Working Paper Series. 4486, 1-33.
• Referans 6: Alesina A. ve Rodrik, (1994).Distruptive Politics and Economic Growth. The Quarterly Journal of Economics. 109(2), 465-490.
• Referans 7: Alesina, A. ve Tabellini, G. (1988). External Debt, Capital Flight and Politic Risk. NBER Working Paper Series. 2610, 1-45.
• Referans 8: Asteriou D. ve Price, S. (2001). Political Instability and Economic Growth: UK Time Series Evidence. Scottish Journal of Political Economy. 48(4), 383-399.
• Referans 9: Barro, R. (1989). A Cros Country Study of Growth, Saving, and Government. NBER Working Paper Series. 2855, 1-57.
• Referans 10: Barro, R. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics. 106(2), 407-443.
• Referans 11: Blomberg, S. B. ve Hess, G. D. (2002). The Temporal Links between Conflict and Economic Activity. Journal of Conflict Resolution. 46(1), 74-90.
• Referans 12: Breusch, T. ve Pagan, A. (1980). The LM Test and Its Application to Model Specification in Econometrics. Review of Economic Studies. 47(1), 239-254.
• Referans 13: Brunetti, A. (1997). Political Variables in Cross-Country Growth Analysis. Journal of Economic Surveys. 11(2), 163-190.
• Referans 14: Campos, N. F. ve Nugent, J. B. (2000). Who is Afraid of Political Instability?. Journal of Development Economics. 67(2002), 157-172.
• Referans 15: Collier, P. (1989). On the Economic Consequences of Civil War. Oxford Economic Papers. 51, 168-183.
• Referans 16: Cordesman, A. H. (2018). Stability in the MENA Region: The Range of Forces Shaping Stability. Centre for Strategic & International Studies. March 22, 1-102.
• Referans 17: Davies, V. A. B. (2010). Capital Flight and Violent Conflict. World Development Report 2011. 63207, 1-13.
• Referans 18: ECB. (2011), Political Tensions in the Middle East and North Africa: Economic Implications for the Euro Area. ECB Monthly Bulletin. April 2011, 15-17.
• Referans 19: Elbadawi, İ. A. (1999). Civil Wars and Poverty: The Role of External Interventions, Political Rights and Economic Growth. Civil Conflicts, Crime and Violence Conference, 22-23 February 1999, World Bank, Washington D.C.
• Referans 20: Gerring, P. B., Bond, P., Barndt, W.T ve Moreno, C. Barnt (2005). Democracy and Economic Growth: A Historical Perspective. World Politics, 57(3), 323-364.
• Referans 21: Gurgul, H. ve Lach, L. (2013). Political Instability and Economic Growth: Evidence from Two Decades of Transition in CEE. Communist and Post-Communist Studies. 46(2013), 189-202.
• Referans 22: Gyimah-Brempong, K. ve Traynor, T. L. (1999). Political Instability, Investment and Economic Growth in Sub-Saharan Africa. Journal of African Economies, 8(1), 52-86.
• Referans 23: Herrala, R. ve Ariss, R. T. (20139, Credit Constraints, Political Instability, and Capital Accumulation. IMF Working Papers. 13(246), 1-26.
• Referans 24: Hoyos, R. ve Sarafidis V. (2006). Testing for Cross-Sectional Dependence in Panel-Data Models. The Stata Journal. 6(4), 482-496.
• Referans 25: Hurwitz, L. (1973). Contemporary Approaches to Political Stability. Comparative Politics. 5(3), 449-463.
• Referans 26: Jong-A-Pin, R. (2009). On the Measurement of Political Instability and Its Impact on Economic Growth. European Journal of Political Economy. 25(2009), 15-29.
• Referans 27: Kónya, L. (2006). Exports and Growth: Granger Causality Analysis on OECD Countries with a Panel Data Approach. Economic Modelling. 23(6), 978-992.
• Referans 28: Le, Q. V. ve Zak, P. J. (2001). Political Risk and Capital Flight. Claremont Colleges Working Papers in Economics, 2001(10), 1-23.
• Referans 29: Lensink, B., Hermes, C. ve Murinde, V. (2000). Capital Flight and Politic Risk. Journal of International Money and Finance. 19(1), 73-92.
• Referans 30: Pesaran M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. Cambridge Working Papers in Economics. 0435, 1-41.
• Referans 31: Pesaran, M.H., Ullah, A. ve Yamagata, T. (2008). A Bias-Adjusted LM Test of Error Cross-Section Independence. The Econometrics Journal. 11(1), 105-127.
• Referans 32: Pesaran M. H. ve Yamagata T. (2008). Testing Slope Homogeneity in Large Panels. Journal of Econometrics. 142(1), 50-93.
• Referans 33: Polachek, S. W. ve Sevastianova, D. (2012). Does Conflict Disrupt Growth? Evidence of the Relationship between Political Instability and National Economic Performance. The Journal of International Trade & Economic Development. 21(3), 361-388.
• Referans 34: Staines, N. (2004). Economic Performance over the Conflict Cycle. IMF Working Paper. 04(95), 1-41.
• Referans 35: Swamy P. A. V. B. (1970). Efficient Inference in a Random Coefficient Regression Model. Econometrica. 38(2), 311–323.
• Referans 35: Sweidan, O. D. (2017). The Influence of Political Regime vs Political Instability on Real Output Evidence from the MENA Region. Journal of Economic Studies, 44(1), 154-167.
• Referans 37: Şanlısoy, S. ve Kök, R. (2010). Politik İstikrarsızlık Ekonomik Büyüme İlişkisi: Kuznets Eğrisi Yaklaşımı. Finans, Politik & Ekonomik Yorumlar, 47(541), 9-22.
• Referans 38: Tang, C. F. ve Abosedra, S. (2014). The Impacts of Tourism, Energy Consumption and Political Instability on Economic Growth in the MENA Countries. Energy Policy. 68(2014), 458-464.
• Referans 39: Zablotsky, E. E (1996). Polıtıcal Stabılıty and Economıc Growth A Two Way Relatıon. CEMA Working Papers. 109, 1-37.