Economic Growth in Times of Drought: The Pivotal Role of Political Institutions

Merwan Aatany (), Essaid Tarbalouti (), Nahid Alaamri () and Abir El Aidi ()
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Merwan Aatany: CADI AYYAD University, PhD Student, Faculty of Law, Economic and Social Sciences (FSJES)
Essaid Tarbalouti: CADI AYYAD University, Professor of Economics, Faculty of Law, Economic and Social Sciences (FSJES)
Nahid Alaamri: CADI AYYAD University, Doctor in Economics (FSJES)
Abir El Aidi: CADI AYYAD University, PhD Student, Faculty of Law, Economic and Social Sciences (FSJES)

A chapter in Proceedings of the International Conference on Multidisciplinary Research in Management and Economics (ICMRME 2025), 2025, pp 607-627 from Springer

Abstract: Abstract In a world increasingly marked by drought and water stress since the early 2000s, both developing and developed nations face significant economic challenges due to successive climatic crises. This study investigates the principal factors influencing economic growth, highlighting the roles of political institutions, international trade, and geography within the context of drought. Utilizing an econometric analysis with a fixed-effects model tailored to panel data from 2002 to 2016, we demonstrate that political institutions exert a more substantial influence on economic growth than international trade and geography. The results indicate that robust political institutions significantly foster economic growth. While international trade enhances productivity and specialization, its impact remains less significant without a solid institutional framework. Geographical factors, on the other hand, influence economic growth indirectly. This research underscores the critical importance of political institutions for sustainable economic development. It concludes that strengthening institutional structures is essential for achieving sustainable economic growth, particularly in the face of environmental challenges such as drought. Therefore, it is recommended that policymakers focus on institutional reforms alongside trade policies to bolster economic resilience and long-term development.

Keywords: Economic growth; Political institutions; International trade; geography; Econometric analysis (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-892-9_36

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