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Economic growth, government size and political instability

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  • Imène Guetat

    (AEI Université de Paris Est Créteil, ESSECT - Ecole Supérieure des Sciences Economiques et Commerciales de Tunis - Université de Tunis)

Abstract

To empirically determine the effects of political instability and size of government on economic growth, we use the GMM system estimator for linear dynamic panel data models on a sample covering up to 19 countries from 1980 to 2012. The major empirical is that higher degrees of political instability are associated with lower growth rates of GDP per capita, unlike the size of government which has a positive effect on economic growth. Also, we figure out that political instability adversely affects growth by lowering the rates of productivity growth and physical and human capital accumulation. Finally, democracy and inflation have a negative effect, while economic freedom is beneficial to growth.

Suggested Citation

  • Imène Guetat, 2016. "Economic growth, government size and political instability," Post-Print hal-04097904, HAL.
    • Handle: RePEc:hal:journl:hal-04097904
    Note: View the original document on HAL open archive server: https://hal.science/hal-04097904
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    References listed on IDEAS

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