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Political Ambiguity and Economic Development: The MENA Countries

Author

Listed:
  • Juliane Brach

    (The Knowledge Company, Germany; Maastricht School of Management, The Netherlands)

  • Willem Spanjers

    (Kingston University, UK; The Rimini Centre for Economic Analysis, Italy)

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.

Suggested Citation

  • Juliane Brach & Willem Spanjers, 2012. "Political Ambiguity and Economic Development: The MENA Countries," Working Paper series 66_12, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:66_12
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    References listed on IDEAS

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    More about this item

    Keywords

    economic development; decision making; ambiguity; development strategy; political economy; Middle East and North Africa;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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