Political institutions and economic performance in Ethiopia: an auto regressive distributed lag bound approach to co-integration

Abstract

PurposeThe main objective of this study is to examine how political institutions affect economic performance in Ethiopia over the 1980–2019 time periods.Design/methodology/approachMainly, the impact of political institution indicators including, level of democracy, political violence, democratic accountability and regime durability have been examined using auto regressive distributed lag (ARDL) bound test approach to co-integration and the error correction model.FindingsThis study confirms that level of democracy and democratic accountability has an adverse long effect on the economic performance of Ethiopia. On the other hand, political violence has a negative short-run causal effect on economic performance in Ethiopia. The study concluded that the deterioration of political institutions harmfully affected economic performance in Ethiopia.Practical implicationsGovernment policymakers should primarily pay attention to promoting and changing those political institutions that harm economic performance. Additionally, better management of political violence has important implications for fostering the economic performance of Ethiopia.Originality/valueOriginality: This study provides some valuable evidence on the nexuses between political institutions and economic performance in Ethiopia. Likely, this is the first investigation on the subject under the consideration to use time analysis and will vigorously contribute to the literature as well by employing the ADRL bound test. Previous studies have examined the impact of the institution on economic growth on a cross-country basis. Further analysis is required to understand the effects of institutions such as level of democracy, political violence and democratic accountability on economic development.

Institutions in the development of Sub-Saharan African countries in 2004–2019

“…The study of the links between institutions and economic growth in the Democratic Republic of Congo concludes that poor economic policies and conflicts, through their effects on total factor productivity and the investment rate, significantly hampered the economic growth of this S-SA country from 1960 to 2000 (Akitoby & Cinyabuguma, 2004). Another interesting piece of evidence on the role of political institutions in Ethiopia was attained by Garedow (2022), who concluded that the deterioration of political institutions harmfully affected economic performance in Ethiopia between 1980 and 2019. However, based on panel Autoregressive Distributed Lags (ARDL) models, it was identified that level of democracy and democratic accountability had a long adverse effect on economic growth.…”

Applying the stimulus-organism-response theory to investigate determinants of students’ social entrepreneurship: moderation role of perceived university support

“…However, social entrepreneurship is still characterized by a lack of theoretical frontiers, and it is also confronted by contesting definitions and theoretical models (Sahasranamam and Nandakumar, 2020; García-Uceda et al , 2022b, Aloulou and Algarni, 2022; Vasilev, 2020), the extant knowledge gap and the limitations of empirical data for assessing contextual differences between countries (Canestrino et al , 2020). Indeed, definitions of social entrepreneurship are often multiple and vague: pursuing social aims via marketed-based approaches (Canestrino et al , 2020); encompassing entrepreneurial and innovative activities and services performed by firms with social aims (Diaz-Sarachaga and Ariza-Montes, 2022); tackling social demands that are not satisfied by commercial firms (Sahasranamam and Nandakumar, 2020); creating innovative solutions to address social problems (Rey-Martí et al , 2016; Duong and Antriyandarti, 2021; Garedow, 2021); aligning organizational values with existing societal values to activate support for change (Chatterjee et al , 2021); and using business principles to drive social impacts (Koehne et al , 2022). The multiplicity of definitions often causes misunderstanding about the concept of social entrepreneurship.…”

The effect of institutional quality on agricultural value added in East Africa

“…Some of these studies contend that institutional quality has an impact on government policies, which in turn affect economic growth [ [16] , [17] , [18] ]. Some others attempt to link institutional quality indicators directly to economic growth [ 16 , [19] , [20] , [21] , [22] ], providing quite varying results. However, while these studies emphasize the importance of strong and better-performing institutions for economic growth, they are heavily biased towards general economic growth [ 20 , [22] , [23] , [24] , [25] ], with little attention paid to the agricultural sector exclusively.…”