The Impact of Political Instability on North Macedonia’s Growth
This study explores the obscure connection between political instability, patterns of public expenditure, and North Macedonia’s economic growth. By examining the effects of both internal and external political crises on fiscal policies and GDP growth from 2003 to 2023, the research uncovers how turb...
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| Format: | Article |
| Language: | English |
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Sciendo
2025-06-01
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| Series: | SEEU Review |
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| Online Access: | https://doi.org/10.2478/seeur-2025-0030 |
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| author | Idrizi Arlinda Besimi Fatmir Çaushi Blerta Abazi |
| author_facet | Idrizi Arlinda Besimi Fatmir Çaushi Blerta Abazi |
| author_sort | Idrizi Arlinda |
| collection | DOAJ |
| description | This study explores the obscure connection between political instability, patterns of public expenditure, and North Macedonia’s economic growth. By examining the effects of both internal and external political crises on fiscal policies and GDP growth from 2003 to 2023, the research uncovers how turbulent political environments have reshaped the country’s economic trajectory and influenced government expenditure decisions. Utilizing a Vector Autoregression (VAR) model, the study reveals the nuanced effects of political instability, demonstrating both immediate negative impacts and delayed positive adjustments. Findings indicate that political instability disrupts public expenditure, redirecting resources from growth-enhancing sectors like infrastructure and education toward crisis management and defense. This reallocation undermines long-term sustainable growth. Important factors like inflation, trade openness, and economic freedom are also examined, revealing intricate relationships with GDP growth. The study concludes that political stability and good governance are prerequisites for effective public expenditure management and economic development. Recommendations include fostering institutional reforms, ensuring efficient allocation of public funds, and promoting socio-political stability to create an environment conducive to sustained growth. This research contributes to understanding the complex interplay between governance and economic performance in transition economies, with implications for both policymakers and scholars. |
| format | Article |
| id | doaj-art-ff1fd3f1e7ce4309bf5cde58c3263e4b |
| institution | Kabale University |
| issn | 1857-8462 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Sciendo |
| record_format | Article |
| series | SEEU Review |
| spelling | doaj-art-ff1fd3f1e7ce4309bf5cde58c3263e4b2025-08-20T03:50:11ZengSciendoSEEU Review1857-84622025-06-0120116418810.2478/seeur-2025-0030The Impact of Political Instability on North Macedonia’s GrowthIdrizi Arlinda0Besimi Fatmir1Çaushi Blerta Abazi21PhD (c) Faculty of Business and Economics, South East European University, Tetovo, North Macedonia2Faculty of Business and Economics, South East European University, Tetovo, North Macedonia3Faculty of Business and Economics, South East European University, Tetovo, North MacedoniaThis study explores the obscure connection between political instability, patterns of public expenditure, and North Macedonia’s economic growth. By examining the effects of both internal and external political crises on fiscal policies and GDP growth from 2003 to 2023, the research uncovers how turbulent political environments have reshaped the country’s economic trajectory and influenced government expenditure decisions. Utilizing a Vector Autoregression (VAR) model, the study reveals the nuanced effects of political instability, demonstrating both immediate negative impacts and delayed positive adjustments. Findings indicate that political instability disrupts public expenditure, redirecting resources from growth-enhancing sectors like infrastructure and education toward crisis management and defense. This reallocation undermines long-term sustainable growth. Important factors like inflation, trade openness, and economic freedom are also examined, revealing intricate relationships with GDP growth. The study concludes that political stability and good governance are prerequisites for effective public expenditure management and economic development. Recommendations include fostering institutional reforms, ensuring efficient allocation of public funds, and promoting socio-political stability to create an environment conducive to sustained growth. This research contributes to understanding the complex interplay between governance and economic performance in transition economies, with implications for both policymakers and scholars.https://doi.org/10.2478/seeur-2025-0030political instabilityeconomic growthpublic expenditurenorth macedoniavector autoregression (var) model |
| spellingShingle | Idrizi Arlinda Besimi Fatmir Çaushi Blerta Abazi The Impact of Political Instability on North Macedonia’s Growth SEEU Review political instability economic growth public expenditure north macedonia vector autoregression (var) model |
| title | The Impact of Political Instability on North Macedonia’s Growth |
| title_full | The Impact of Political Instability on North Macedonia’s Growth |
| title_fullStr | The Impact of Political Instability on North Macedonia’s Growth |
| title_full_unstemmed | The Impact of Political Instability on North Macedonia’s Growth |
| title_short | The Impact of Political Instability on North Macedonia’s Growth |
| title_sort | impact of political instability on north macedonia s growth |
| topic | political instability economic growth public expenditure north macedonia vector autoregression (var) model |
| url | https://doi.org/10.2478/seeur-2025-0030 |
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