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Political Ambiguity and Economic Development: The MENA Countries Pre-Commercial Procurement of Innovation

Juliane Brach and Willem Spanjers
Additional contact information
Juliane Brach: The Knowledge Company, Germany and Maastricht School of Management, The Netherlands, Contact: jbrach@knowledgecompany.eu
Willem Spanjers: Kingston University, United Kingdom and Rimini Center for Economic Analysis, Italy. Contact: w.spanjers@kingston.ac.uk

No 2012/39, Working Papers from Maastricht School of Management

Abstract: In this paper we provide a coherent framework for analyzing the impact of incalculable political risk, i.e. political ambiguity, on economic development and the choice of development strategy. Using indicators for the levels of internal and external political ambiguity, we analyze the growth paths of MENA countries based on annual data for the period from 1980 to 2008. Succession rules for governments are our indicator for internal political ambiguity, the potential for becoming involved in disruptive international conflicts serves as an indicator for external political ambiguity. Our results show that political ambiguity has a negative impact on both the level of per capita GDP and its growth. Our theoretical model suggests that political ambiguity biases development strategies, leading to an underinvestment in intensive sources of growth.

Keywords: economic development; decision making; ambiguity; development strategy; political economy; Middle East and North Africa (search for similar items in EconPapers)
JEL-codes: D81 O14 O33 O53 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2012-10
New Economics Papers: this item is included in nep-ara, nep-pol and nep-upt
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