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Political Instability and Economic Growth in Egypt

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  • Abdelkader Hossam Eldin Mohammed

    (Ain Shams University-Faculty of Commerce, Economic Department, Cairo, Egypt)

Abstract

This paper explores the relationship between political instability and economic growth in Egypt. The literature claims there is a relationship between political instability and economic performance. Empirical studies, however, show different results for different world regions, different countries, and different periods. Studies concerning the effect of political instability on the economic growth path are rich with cases from several countries, but do not include developing countries, such as Egypt. This paper investigates the robust relationship between economic growth in Egypt and political instability in the last five decades. We examine time-series data from 1972 to 2013, using the Cointegration approach to determine the short-term and long-term relationships. Consequently, we use an Error-Correction Model (ECM) to estimate the relationship between economic growth and political instability in Egypt. The results show that the impact of political instability on economic growth is negative and significant for all indexes of political instability used in the case of Egypt. The results have implications for policymakers who are planning for the economic growth of the country in the short- and long-term.

Suggested Citation

  • Abdelkader Hossam Eldin Mohammed, 2017. "Political Instability and Economic Growth in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 13(2), pages 1-11, August.
    • Handle: RePEc:bpj:rmeecf:v:13:y:2017:i:2:p:11:n:4
    DOI: 10.1515/rmeef-2017-0019
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    5. Ahsan Abbas & Eatzaz Ahmed & Fazal Husain, 2019. "Political and Economic Uncertainty and Investment Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 58(3), pages 307-331.

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    More about this item

    Keywords

    political instability; economic growth; cointegration; ECM;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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