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Political Freedom, Political Instability, and Policy Uncertainty: A Study of Political Institutions and Private Investment in Developing Countries

Authors :
Yi Feng
Source :
International Studies Quarterly. 45:271-294
Publication Year :
2001
Publisher :
Oxford University Press (OUP), 2001.

Abstract

This paper examines whether democracy and other major characteristics of political institutions have any significant consequences for private investment. I isolate three political determinants that may affect property rights and private investment: political freedom, political instability, and policy uncertainty. The major findings in this paper can be characterized as follows: Political freedom promotes private investment, particularly through the channel of improving human capital formation. Political instability, as measured by the variability of political freedom, has a negative effect on private investment. Finally, policy uncertainty, as measured by the variability of government capacity, adversely affects private investment. These findings have been tested rigorously through using variables controlling for both domestic and international conditions.

Details

ISSN :
14682478 and 00208833
Volume :
45
Database :
OpenAIRE
Journal :
International Studies Quarterly
Accession number :
edsair.doi...........f978d1203016d78e7361948be4b58150