Political Instability and Economic Growth in Developing Countries

Abstract

Utilizing information on various coup d'état events that occurred in sub-Saharan Africa, the research empirically investigates the specification of a connection between political instability (PI) on economic growth. It reveals that when a major component of a number of PI events is used in an expanded production function, the basic specification checks are satisfied. However, employing separate events to characterize PI, like ' successful' coups, could lead to an incorrect relationship specification, lower model fit, and an underestimation of the negative PI effect.