Political Instability, Uncertainty, Democracy, and Economic Growth in Egypt

Hossam Eldin Abdelkader

No 953, Working Papers from Economic Research Forum

Abstract: This paper aims to determine if there is a relationship between political instability, uncertainty, and political regime, on the one hand, and economic growth in Egypt, on the other. According to the literature, there is a relationship between political regime and stability and economic performance. However, the empirical studies show different results for different regions, different countries, and different periods. Studies concerning the effect of political instability on economic growth are rich in the case of some countries, but are not for other developing countries, like Egypt. This paper tries to estimate the robust relationship between economic growth in Egypt and political instability, uncertainty, and political regime, and estimates their impact on the Egyptian economy during the last four decades. Furthermore, the paper tests the uncertainty impact, resulting from unstable political and economic conditions on economic growth in Egypt. Accordingly, time-series data are used from 1972 to 2013 under the cointegration approach to determine the short- and long-run relationships. Moreover, a GARCH model approach is used in Error-Correction Model (ECM) to introduce the uncertainty impact, and Pesaran’s bound test is used to confirm the results. Results assert the positive impact of the level of democracy on economic growth, while they assert the negative impact of uncertainty on economic growth. However, the impact of political instability on economic growth is ambiguous in the case of Egypt. The results are helpful for policymakers targeting Egypt’s economic growth in the short- and long-runs.

Pages: 30
Date: 2015-10, Revised 2015-10
New Economics Papers: this item is included in nep-ara, nep-gro and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published by The Economic Research Forum (ERF)

Downloads: (external link)
http://erf.org.eg/wp-content/uploads/2015/12/953.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://erf.org.eg/wp-content/uploads/2015/12/953.pdf [301 Moved Permanently]--> https://erf.org.eg/wp-content/uploads/2015/12/953.pdf)
http://bit.ly/2mR265M (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:953

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().