The nexus between social unrest and economic growth in Middle East and Central Asia countries

Abstract

Purpose: Conflict and civil strife adversely affect the economy since it severely disrupts the normal, daily routine of economic activity. Similarly, economic downturns can trigger discontent that has the potential to escalate into social unrest and strife. Using the recently compiled index on social unrest (RSUI) of Barrett et al. (2020), the paper sets out to examine the nexus between economic growth and social unrest in the case of 29 Middle East and Central Asia countries over the period 2000–2018. Design/methodology/approach: To probe into the issue at hand, the paper adopts a panel causality approach. To this effect, two panel causality tests are used. The first is the heterogeneous panel causality model proposed by Dumitrescu and Hurlin (2012) is employed. The second panel Granger causality test is the frequency domain causality test constructed by Breitung and Candelon (2006) and extended for panel testing by Croux and Reusens (2013). Findings: The results of the causality tests indicate a strong bidirectional nexus between civil unrest and economic growth. The findings support the contention that civil strife adversely affects economic performance and economic downturns can trigger discontent and unrest. Research limitations/implications: Albeit consistent and robust, the results reported herein concern the specific sample of countries under scrutiny. Extending the analysis to other groups of countries will offer better insights into the nexus between civil unrest and economic performance. Originality/value: To the best of the authors’ knowledge, the present paper is the first to address the nexus between social unrest and economic growth for this group of countries using the recently compiled index on social unrest (RSUI).