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THE MACROECONOMIC DETERMINANTS OF POLITICAL STABILITY IN POST-SOVIET COUNTRIES MOVED FROM CENTRALLY PLANNED ECONOMY TO FREE MARKET ECONOMY

Year 2018, Volume: 19 Issue: 1, 163 - 175, 31.05.2018

İzzet Taşar

Abstract

The
successful integration of the post-Soviet countries to European Union and to
other market economies via economic and political transition has been a
substantial issue for international economic and political relations. Amid all
the structural changes it has been of significant importance for the policy makers
to set forth the macroeconomic determinants of the political stability in
transition economies moved from centrally planned economy through market
economy. In this study the macroeconomic determinants of the political
stability within the transition economies between 2002-2015 have been
investigated by utilizing the panel data method. Depending on the empirical
analysis, it has been concluded that GDP per capita and consumer price index
are the most important macroeconomic factors affecting the political stability
in the short-term.  

Keywords

Political Stability Transition Economies Post-Soviet Countries

References

  • Aisen, A., & Veiga, F. J. (2013). How does political instability affect economic growth?. European Journal of Political Economy, 29, 151-167.
  • Alesina, A. (1987). Macroeconomic policy in a two-party system as a repeated game. The Quarterly Journal of Economics, 102(3), 651-678.
  • Alesina, A., & Perotti, R. (1996). Income distribution, political instability, and investment. European economic review, 40(6), 1203-1228.
  • Al-Mulali, U., Ozturk, I., (2015) "The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region." Energy 84, 382-89.
  • Angelo, A., Gruner, H., (2000), "A Model of Stability and Persistence in a Democracy." Games and Economic Behavior 33 (2000): 20-40.
  • Arriola, L. R. (2009). Patronage and political stability in Africa. Comparative Political Studies, 42(10), 1339-1362.
  • Brada, J. C., Kutan, A. M., & Yigit, T. M. (2006). The effects of transition and political instability on foreign direct investment inflows. Economics of Transition, 14(4), 649-680.
  • Breusch, T., Pagan, A., 1980. The Lagrange multiplier test and its application to model specification in econometrics. Rev. Econ. Stud. 47, 239–253.
  • Brunetti, A., 1997. Political variables in cross-country growth analysis. Journal of Economic Surveys 11, 163–190.
  • Chen, B., Feng, Y., 1996. Some political determinants of economic growth: theory and empirical implications. European Journal of Political Economy 12, 609–627.
  • Darby, J., Li, C., Muscatelli, A., 2004. Political uncertainty, public expenditure and growth. European Journal of Political Economy 20, 153–179
  • Devereux, M., Wen, J.F., 1998. Political instability, capital taxation, and growth. European Economic Review 42, 1635–1651.
  • Downs, A. (1957). An economic theory of political action in a democracy. Journal of Political Economy, 65(2), 135-150. Džunić, M. (2007). Interdependence of Political Stability and Economic Growth as a Determinant af Successful Market Reforms. Ekonomska Istrazivanja, Mar 2011, Vol.24(1), pp.28-37
  • Edison, H.J., Levine, R., Ricci, L., Sløk, T., 2002. International financial integration and economic growth. Journal of International Money and Finance 21, 749–776.
  • Elder, J., 2004. Another perspective on the effects of inflation uncertainty. Journal of Money, Credit, and Banking 36, 911–928.
  • Ellis, P. D., Davies, H., & Wong, A. H. K. (2011). Export intensity and marketing in transition economies: Evidence from China. Industrial Marketing Management, 40(4), 593-602.
  • Fernando, A., Mendes, C., "Growth, Consumption and Political Stability in China." NIPE 28 (2011): Universidade do Minho.
  • Fischer, S., Sahay, R., & Vegh, C. A. (1996). Economies in transition: The beginnings of growth. The American Economic Review, 86(2), 229-233.
  • Frey, B. S., & Schneider, F. (1978). An empirical study of politico-economic interaction in the United States. The Review of Economics and Statistics, 174-183.
  • Gates, S., Hegre, H., Jones, M. P., & Strand, H. (2006). Institutional inconsistency and political instability: Polity duration, 1800–2000. American Journal of Political Science, 50(4), 893-908.
  • Haksoon, K., (2010), "Political Stability and Foreign Direct Investment." International Journal of Economics and Finance 2.3
  • Hibbs, D. A. (1977). Political parties and macroeconomic policy. American political science review, 71(04), 1467-1487.
  • Jong-a-Pin, R., 2009. On the measurement of political instability and its impact on economic growth. European Journal of Political Economy 25, 15–29
  • Kanybek, N., Hans J. C. (2012), "Corruption: Democracy, Autocracy, and Political Stability." Economic Analysis & Policy 42.1
  • Khan, S. U., & Saqib, O. F. (2011). Political instability and inflation in Pakistan. Journal of Asian economics, 22(6), 540-549.
  • Looi, C.T., (2013), "A Study of Political Stability in Malaysia: A Study about National Civilian Perception." IOSR Journal Of Humanities And Social Science 8.4, 92-146.
  • Lorenzo, R., (2016) "Political stability and trade agreements: Evidence for ‘endgame FTAs’." European Journal of Political Economy, 4(1), 56-67
  • Mădălina, R. (2015), "Political stability - a condition for sustainable growth in Romania?" Procedia Economics and Finance 30, 751-57.
  • Margolis, J. E. (2010), “Understanding Political Stability and Instability.” Civil Wars 12.3, 326-345.
  • Mohammad, F.R., Stefan W., (2016). "Corruption and political stability: Does the youth bulge matter?" European Journal of Political Economy
  • Nordhaus, W. D. (1975). The political business cycle. The review of economic studies, 42(2), 169-190. Pesaran, Hasem, M., (2004), “General Diagnostic Tests for Cross Section Dependence in Panels”, Working Paper No:0435, University of Cambridge.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M.H., Ullah, A., Yamagata, T., 2008. A bias-adjusted LM test of error cross section independence. Econometrics Journal 11, 105–127.
  • Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50-93.
  • Petrakos, George C., (1997) Industrial Structure and Change in the EuropeanUnion, Eastern European Economics, 35:2, 41-63
  • Rodrik, D. (1998), Why Do More Open Ecomomies Have Bigger Goverments? Journal of Political Economy,106(5),997-1032
  • Rotunno, L. (2016). Political stability and trade agreements: Evidence for ‘endgame FTAs’. European Journal of Political Economy, 45, 133-148. Shiping, Z., (2012), "China’s Political Stability: Global Comparisons." Journal of Chinese Political Science 17, 1-13.
  • Sheafer, T., & Shenhav, S. (2013). Political culture congruence and political stability: Revisiting the congruence hypothesis with prospect theory. Journal of Conflict Resolution, 57(2), 232-257.
  • Svejnar, J. (2002). Transition economies: Performance and challenges. The Journal of Economic Perspectives, 16(1), 3-28.
  • Thad, D., (2005) "Resource Dependence, Economic Performance, and Political Stability." Journal of Conflict Resolution 49.4, 451-82.
  • Veerasathpurush, A., Allareddy, V., Rampa, S., Nalliah, P.R, Elangovan, S., "Global Dental Research Productivity and Its Association With Human Development, Gross National Income, and Political Stability." Journal of Evidence-Based Dental Practice 15 (2015): 90-96.
  • Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and statistics, 69(6), 709-748.

Year 2018, Volume: 19 Issue: 1, 163 - 175, 31.05.2018

İzzet Taşar

Abstract

References

  • Aisen, A., & Veiga, F. J. (2013). How does political instability affect economic growth?. European Journal of Political Economy, 29, 151-167.
  • Alesina, A. (1987). Macroeconomic policy in a two-party system as a repeated game. The Quarterly Journal of Economics, 102(3), 651-678.
  • Alesina, A., & Perotti, R. (1996). Income distribution, political instability, and investment. European economic review, 40(6), 1203-1228.
  • Al-Mulali, U., Ozturk, I., (2015) "The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region." Energy 84, 382-89.
  • Angelo, A., Gruner, H., (2000), "A Model of Stability and Persistence in a Democracy." Games and Economic Behavior 33 (2000): 20-40.
  • Arriola, L. R. (2009). Patronage and political stability in Africa. Comparative Political Studies, 42(10), 1339-1362.
  • Brada, J. C., Kutan, A. M., & Yigit, T. M. (2006). The effects of transition and political instability on foreign direct investment inflows. Economics of Transition, 14(4), 649-680.
  • Breusch, T., Pagan, A., 1980. The Lagrange multiplier test and its application to model specification in econometrics. Rev. Econ. Stud. 47, 239–253.
  • Brunetti, A., 1997. Political variables in cross-country growth analysis. Journal of Economic Surveys 11, 163–190.
  • Chen, B., Feng, Y., 1996. Some political determinants of economic growth: theory and empirical implications. European Journal of Political Economy 12, 609–627.
  • Darby, J., Li, C., Muscatelli, A., 2004. Political uncertainty, public expenditure and growth. European Journal of Political Economy 20, 153–179
  • Devereux, M., Wen, J.F., 1998. Political instability, capital taxation, and growth. European Economic Review 42, 1635–1651.
  • Downs, A. (1957). An economic theory of political action in a democracy. Journal of Political Economy, 65(2), 135-150. Džunić, M. (2007). Interdependence of Political Stability and Economic Growth as a Determinant af Successful Market Reforms. Ekonomska Istrazivanja, Mar 2011, Vol.24(1), pp.28-37
  • Edison, H.J., Levine, R., Ricci, L., Sløk, T., 2002. International financial integration and economic growth. Journal of International Money and Finance 21, 749–776.
  • Elder, J., 2004. Another perspective on the effects of inflation uncertainty. Journal of Money, Credit, and Banking 36, 911–928.
  • Ellis, P. D., Davies, H., & Wong, A. H. K. (2011). Export intensity and marketing in transition economies: Evidence from China. Industrial Marketing Management, 40(4), 593-602.
  • Fernando, A., Mendes, C., "Growth, Consumption and Political Stability in China." NIPE 28 (2011): Universidade do Minho.
  • Fischer, S., Sahay, R., & Vegh, C. A. (1996). Economies in transition: The beginnings of growth. The American Economic Review, 86(2), 229-233.
  • Frey, B. S., & Schneider, F. (1978). An empirical study of politico-economic interaction in the United States. The Review of Economics and Statistics, 174-183.
  • Gates, S., Hegre, H., Jones, M. P., & Strand, H. (2006). Institutional inconsistency and political instability: Polity duration, 1800–2000. American Journal of Political Science, 50(4), 893-908.
  • Haksoon, K., (2010), "Political Stability and Foreign Direct Investment." International Journal of Economics and Finance 2.3
  • Hibbs, D. A. (1977). Political parties and macroeconomic policy. American political science review, 71(04), 1467-1487.
  • Jong-a-Pin, R., 2009. On the measurement of political instability and its impact on economic growth. European Journal of Political Economy 25, 15–29
  • Kanybek, N., Hans J. C. (2012), "Corruption: Democracy, Autocracy, and Political Stability." Economic Analysis & Policy 42.1
  • Khan, S. U., & Saqib, O. F. (2011). Political instability and inflation in Pakistan. Journal of Asian economics, 22(6), 540-549.
  • Looi, C.T., (2013), "A Study of Political Stability in Malaysia: A Study about National Civilian Perception." IOSR Journal Of Humanities And Social Science 8.4, 92-146.
  • Lorenzo, R., (2016) "Political stability and trade agreements: Evidence for ‘endgame FTAs’." European Journal of Political Economy, 4(1), 56-67
  • Mădălina, R. (2015), "Political stability - a condition for sustainable growth in Romania?" Procedia Economics and Finance 30, 751-57.
  • Margolis, J. E. (2010), “Understanding Political Stability and Instability.” Civil Wars 12.3, 326-345.
  • Mohammad, F.R., Stefan W., (2016). "Corruption and political stability: Does the youth bulge matter?" European Journal of Political Economy
  • Nordhaus, W. D. (1975). The political business cycle. The review of economic studies, 42(2), 169-190. Pesaran, Hasem, M., (2004), “General Diagnostic Tests for Cross Section Dependence in Panels”, Working Paper No:0435, University of Cambridge.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M.H., Ullah, A., Yamagata, T., 2008. A bias-adjusted LM test of error cross section independence. Econometrics Journal 11, 105–127.
  • Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50-93.
  • Petrakos, George C., (1997) Industrial Structure and Change in the EuropeanUnion, Eastern European Economics, 35:2, 41-63
  • Rodrik, D. (1998), Why Do More Open Ecomomies Have Bigger Goverments? Journal of Political Economy,106(5),997-1032
  • Rotunno, L. (2016). Political stability and trade agreements: Evidence for ‘endgame FTAs’. European Journal of Political Economy, 45, 133-148. Shiping, Z., (2012), "China’s Political Stability: Global Comparisons." Journal of Chinese Political Science 17, 1-13.
  • Sheafer, T., & Shenhav, S. (2013). Political culture congruence and political stability: Revisiting the congruence hypothesis with prospect theory. Journal of Conflict Resolution, 57(2), 232-257.
  • Svejnar, J. (2002). Transition economies: Performance and challenges. The Journal of Economic Perspectives, 16(1), 3-28.
  • Thad, D., (2005) "Resource Dependence, Economic Performance, and Political Stability." Journal of Conflict Resolution 49.4, 451-82.
  • Veerasathpurush, A., Allareddy, V., Rampa, S., Nalliah, P.R, Elangovan, S., "Global Dental Research Productivity and Its Association With Human Development, Gross National Income, and Political Stability." Journal of Evidence-Based Dental Practice 15 (2015): 90-96.
  • Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and statistics, 69(6), 709-748.
There are 42 citations in total.

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İzzet Taşar

Publication Date May 31, 2018
Submission Date December 26, 2017
Published in Issue Year 2018Volume: 19 Issue: 1

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APA Taşar, İ. (2018). THE MACROECONOMIC DETERMINANTS OF POLITICAL STABILITY IN POST-SOVIET COUNTRIES MOVED FROM CENTRALLY PLANNED ECONOMY TO FREE MARKET ECONOMY. Cumhuriyet Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 19(1), 163-175.
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