Cross-Regional Variations in Political Turbulence Across Emerging Economies: Examining the Consequences for Macroeconomic Expansion

Abstract

The present research explores how governmental volatility shapes output expansion trajectories within emerging market economies, with particular emphasis on geographical heterogeneity. Applying the Method of Moments Quantile Regression (MMQR) technique to a heterogeneous cross-country dataset spanning nearly three decades (1996-2023), this analysis incorporates distributional characteristics encompassing both central tendency and dispersion parameters. Empirical evidence demonstrates that governmental uncertainty substantially constrains output expansion across emerging markets, with particularly detrimental consequences observable in Asian and Sub-Saharan territories. Meanwhile, transitional European economies exhibit comparable adverse patterns, though these relationships fail to achieve conventional statistical thresholds. Consequently, the deleterious ramifications of governmental volatility appear relatively attenuated within European transitional economies compared to their Asian and African counterparts. Furthermore, governance effectiveness demonstrates negligible direct associations with macroeconomic expansion throughout these geographical clusters. Nevertheless, robust institutional frameworks prove instrumental in preserving governmental continuity, thereby cultivating favorable conditions for sustained output advancement. Accordingly, this investigation advocates for strengthening governance mechanisms in ways that facilitate macroeconomic prosperity. Additionally, by highlighting the critical importance of reducing governmental uncertainty, the research offers actionable recommendations for establishing stable political climates that support durable economic advancement.