Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)

Fikre Kura

doi:doi:10.11648/j.ijebo.20241204.12

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Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)

Fikre Kura^*

Published in International Journal of Economic Behavior and Organization (Volume 12, Issue 4)

Received: 28 October 2024 Accepted: 22 November 2024 Published: 27 December 2024

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Abstract

Political stability is extensively recognized as a crucial determinant of economic growth and development in a broader context. Grounded in this assertion, this research endeavor sought to explore the correlation between political instability and economic growth within the Ethiopian context from 1996 to 2020. Throughout the duration of the study, Ethiopia has implemented various institutional reform initiatives aimed at fostering economic growth and establishing a stable political environment. Macro-level trend analyses substantiate that, over the last twenty years, Ethiopia has achieved significant economic growth, albeit hampered by macroeconomic mismanagement; nevertheless, the federation has not succeeded in attaining a stable political framework. In this context, employing the Autoregressive Distributed Lag (ARDL) approach, this investigation has revealed a long-term co-integration between political instability and economic growth in Ethiopia, with political instability exerting a negative and significant impact on economic growth in both the short and long term. Additionally, the study has identified that political instability adversely influences economic growth by diminishing investment, human capital, labor, and the country’s exports. Consequently, it is proposed that ensuring political stability constitutes one of the essential prerequisites for achieving sustainable and accelerated economic growth in Ethiopia.

Published in	International Journal of Economic Behavior and Organization (Volume 12, Issue 4)
DOI	10.11648/j.ijebo.20241204.12
Page(s)	187-212
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Political Instability, Economic Growth, Autoregressive Distributed Lag (ARDL), Ethiopia

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Kura, F. (2024). Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). International Journal of Economic Behavior and Organization, 12(4), 187-212. https://doi.org/10.11648/j.ijebo.20241204.12

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Kura, F. Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). Int. J. Econ. Behav. Organ. 2024, 12(4), 187-212. doi: 10.11648/j.ijebo.20241204.12

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Kura F. Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). Int J Econ Behav Organ. 2024;12(4):187-212. doi: 10.11648/j.ijebo.20241204.12

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@article{10.11648/j.ijebo.20241204.12,
  author = {Fikre Kura},
  title = {Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)
},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {12},
  number = {4},
  pages = {187-212},
  doi = {10.11648/j.ijebo.20241204.12},
  url = {https://doi.org/10.11648/j.ijebo.20241204.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20241204.12},
  abstract = {Political stability is extensively recognized as a crucial determinant of economic growth and development in a broader context. Grounded in this assertion, this research endeavor sought to explore the correlation between political instability and economic growth within the Ethiopian context from 1996 to 2020. Throughout the duration of the study, Ethiopia has implemented various institutional reform initiatives aimed at fostering economic growth and establishing a stable political environment. Macro-level trend analyses substantiate that, over the last twenty years, Ethiopia has achieved significant economic growth, albeit hampered by macroeconomic mismanagement; nevertheless, the federation has not succeeded in attaining a stable political framework. In this context, employing the Autoregressive Distributed Lag (ARDL) approach, this investigation has revealed a long-term co-integration between political instability and economic growth in Ethiopia, with political instability exerting a negative and significant impact on economic growth in both the short and long term. Additionally, the study has identified that political instability adversely influences economic growth by diminishing investment, human capital, labor, and the country’s exports. Consequently, it is proposed that ensuring political stability constitutes one of the essential prerequisites for achieving sustainable and accelerated economic growth in Ethiopia.
},
 year = {2024}
}

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T1  - Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)

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T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
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AB  - Political stability is extensively recognized as a crucial determinant of economic growth and development in a broader context. Grounded in this assertion, this research endeavor sought to explore the correlation between political instability and economic growth within the Ethiopian context from 1996 to 2020. Throughout the duration of the study, Ethiopia has implemented various institutional reform initiatives aimed at fostering economic growth and establishing a stable political environment. Macro-level trend analyses substantiate that, over the last twenty years, Ethiopia has achieved significant economic growth, albeit hampered by macroeconomic mismanagement; nevertheless, the federation has not succeeded in attaining a stable political framework. In this context, employing the Autoregressive Distributed Lag (ARDL) approach, this investigation has revealed a long-term co-integration between political instability and economic growth in Ethiopia, with political instability exerting a negative and significant impact on economic growth in both the short and long term. Additionally, the study has identified that political instability adversely influences economic growth by diminishing investment, human capital, labor, and the country’s exports. Consequently, it is proposed that ensuring political stability constitutes one of the essential prerequisites for achieving sustainable and accelerated economic growth in Ethiopia.

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Fikre Kura

Center for Federalism and Governance, College of Law and Governance Studies, Addis Ababa University, Addis Ababa, Ethiopia

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Kura, F. (2024). Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). International Journal of Economic Behavior and Organization, 12(4), 187-212. https://doi.org/10.11648/j.ijebo.20241204.12

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Kura, F. Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). Int. J. Econ. Behav. Organ. 2024, 12(4), 187-212. doi: 10.11648/j.ijebo.20241204.12

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AMA Style

Kura F. Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020). Int J Econ Behav Organ. 2024;12(4):187-212. doi: 10.11648/j.ijebo.20241204.12

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@article{10.11648/j.ijebo.20241204.12,
  author = {Fikre Kura},
  title = {Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)
},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {12},
  number = {4},
  pages = {187-212},
  doi = {10.11648/j.ijebo.20241204.12},
  url = {https://doi.org/10.11648/j.ijebo.20241204.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20241204.12},
  abstract = {Political stability is extensively recognized as a crucial determinant of economic growth and development in a broader context. Grounded in this assertion, this research endeavor sought to explore the correlation between political instability and economic growth within the Ethiopian context from 1996 to 2020. Throughout the duration of the study, Ethiopia has implemented various institutional reform initiatives aimed at fostering economic growth and establishing a stable political environment. Macro-level trend analyses substantiate that, over the last twenty years, Ethiopia has achieved significant economic growth, albeit hampered by macroeconomic mismanagement; nevertheless, the federation has not succeeded in attaining a stable political framework. In this context, employing the Autoregressive Distributed Lag (ARDL) approach, this investigation has revealed a long-term co-integration between political instability and economic growth in Ethiopia, with political instability exerting a negative and significant impact on economic growth in both the short and long term. Additionally, the study has identified that political instability adversely influences economic growth by diminishing investment, human capital, labor, and the country’s exports. Consequently, it is proposed that ensuring political stability constitutes one of the essential prerequisites for achieving sustainable and accelerated economic growth in Ethiopia.
},
 year = {2024}
}

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TY  - JOUR
T1  - Unpacking the Impact of Political Instability on Economic Growth in Ethiopia: Analysis of the Direct and Indirect Pathways (1995-2020)

AU  - Fikre Kura
Y1  - 2024/12/27
PY  - 2024
N1  - https://doi.org/10.11648/j.ijebo.20241204.12
DO  - 10.11648/j.ijebo.20241204.12
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 187
EP  - 212
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20241204.12
AB  - Political stability is extensively recognized as a crucial determinant of economic growth and development in a broader context. Grounded in this assertion, this research endeavor sought to explore the correlation between political instability and economic growth within the Ethiopian context from 1996 to 2020. Throughout the duration of the study, Ethiopia has implemented various institutional reform initiatives aimed at fostering economic growth and establishing a stable political environment. Macro-level trend analyses substantiate that, over the last twenty years, Ethiopia has achieved significant economic growth, albeit hampered by macroeconomic mismanagement; nevertheless, the federation has not succeeded in attaining a stable political framework. In this context, employing the Autoregressive Distributed Lag (ARDL) approach, this investigation has revealed a long-term co-integration between political instability and economic growth in Ethiopia, with political instability exerting a negative and significant impact on economic growth in both the short and long term. Additionally, the study has identified that political instability adversely influences economic growth by diminishing investment, human capital, labor, and the country’s exports. Consequently, it is proposed that ensuring political stability constitutes one of the essential prerequisites for achieving sustainable and accelerated economic growth in Ethiopia.

VL  - 12
IS  - 4
ER  -

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