THE IMPACT OF POLITICAL STABILITY ON ECONOMIC PERFORMANCE IN AFRICA: EVIDENCE FROM 40 AFRICAN COUNTRIES

Like all other human activities, the economy would not be properly exercised in a place where there is societal unsteadiness. Indeed, governments place the maintenance of political stability at the centre of their interests. So, what is the impact of maintaining this stability upon economic performance? To provide an answer to this question, we have studied this dynamic on the most unstable continent on the planet, Africa. This paper attempts to model the relationship between these two components under a dynamic type model, Autoregressive Delayed Model (ARDL), on a panel of forty African countries over a period of 20 years that goes from 1997 to 2017. The paper’s empirical results reveal that political stability has an impact on GDP per capita through investment. Moreover, the nature of this impact may depend on the location of an African country in the sample. Indeed, this model allows us to distinguish three categories of countries where the impact of stability on economic performance is either positive, negative or neutral. In the short run, political stability positively impacts GDP per capita across the Southern African region, while its impact is neutral for North African countries