Political Instability, Corruption, and Economic Growth: Evidence from a Panel of OECD Countries

Emin Ahmet Kaplan and Alpaslan Akçoraoğlu
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Emin Ahmet Kaplan: Gazi University
Alpaslan Akçoraoğlu: Gazi University

Business and Economics Research Journal, 2017, vol. 8, issue 3, 363-377

Abstract: The major aim of this paper is to examine the empirical relations between economic growth and a broad group of political instability factors including corruption, government instability, internal and external conflicts, religious and ethnic tensions, democratic accountability and bureaucracy quality. Moreover, one of the main objectives of our paper is to explore the effects of serious problems such as political instability and corruption on economic growth for a panel of OECD countries by using the system-GMM (Generalized Method of Moments) estimator during the period 1984-2012. Our findings confirm most of the literature that political instability is negatively associated with economic growth. We found strong evidence in favor of the hypothesis that corruption negatively affects economic growth. Our paper presents strong evidence in favor of the view that government stability and internal and external conflicts are obstacles for rapid economic growth. However, the results of system-GMM estimation indicate that democratic accountability, ethnic and religious tensions and bureaucracy quality have no statistically significant impact on economic growth of OECD countries.

Keywords: Political Instability; Corruption; Economic Growth; Political Conflict (search for similar items in EconPapers)
JEL-codes: D72 D73 O43 P48 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0277

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