State Political Risk and Industrial Performance: Evidence from Sub-Saharan Africa
DOI:
https://doi.org/10.15408/sjie.v15i2.49642Keywords:
State-Sanctioned Violence, Industrialization, Instrumental Variables, Resilience, Causal InferenceAbstract
Research Originality: This study offers an original external instrumental variable (IV) analysis of the causal link between state political risk and industrialization in Sub-Saharan Africa, using constitutionally fixed executive elections as a novel instrument.
Research Objectives: This study tests the hypothesis that state-sanctioned violence negatively impacts industrial growth in Sub-Saharan Africa.
Research Methods: This study employs a Two-Stage Least Squares (2SLS) model on a panel of 30 African countries (2000–2023). State political risk is measured by the Political Terror Scale, which captures state-sanctioned violence and is instrumented by fixed election timing. Industrial value-added growth is the dependent variable.
Empirical Results: We find no statistically significant causal effect of state-sanctioned violence on industrial growth. This null result is robust across 2SLS, Limited Information Maximum Likelihood(LIML), and GMM estimators.
Implications: Industrial policy in moderately unstable African contexts should prioritize core economic and regulatory constraints over broad political risk mitigation. The findings point to significant industrial resilience.
JEL Classification: P00, D72, O14, C36, O55
How to Cite:
Madyangove, T. N., & Rezki, J. F. (2026). State Political Risk and Industrial Performance: Evidence from Sub-Saharan Africa. Signifikan: Jurnal Ilmu Ekonomi, 15(2), 453-470. https://doi.org/10.15408/sjie.v15i2.49642.
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