Political Instability and Growth: The Central African Republic

 
Author/Editor: Ghura, Dhaneshwar ; Mercereau, Benoît
 
Publication Date: May 01, 2004
 
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Summary: This paper provides empirical evidence that the propensity for political instability in the Central African Republic (C.A.R.) has been increased by low tax revenues and deteriorations in the terms of trade. The direct effect of political instability on economic growth is not statistically significant, once account is taken of domestic investment, and economic growth in neighboring countries. The policy implications are: (i) mobilization of domestic revenues to pay public employees' salaries and provide basic social services would lower the probability of coups; (ii) economic diversification would reduce the propensity for adverse terms of trade shocks to fuel coups; and (iii) neighboring countries' efforts to resolve conflicts and achieve sustained growth would be beneficial for the C.A.R.'s economic performance.
 
Series: Working Paper No. 04/80
Subject(s): Economic conditions | Central African Republic | Economic growth

Author's Keyword(s): Political instability | Economic Growth | Conflicts | External Shocks
 
English
Publication Date: May 01, 2004
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0802004 Pages: 22
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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