Economic and Institutional Determinants of Political Stability in Parliamentary and Presidential Systems

This study aims to examine the effects of economic performance and institutional factors on political stability in countries governed by presidential and parliamentary systems, which are types of political systems. Considering Persson & Tabellini’s (2003) political system classification, it has analyzed the relationship between political stability and economic performance, institutional factors, using the ARDL method over the period 2002-2017 for selected countries. According to the results, there is a positive relationship between economic growth, the rule of law, and political stability in presidential systems in the short run. There is a positive relationship between inflation and political stability and a negative relationship between freedom of expression and political stability in parliamentary systems. In the long run, in presidential systems, economic growth, inflation, the quality of regulatory reforms, freedom of expression are positively correlated with political stability; the rule of law and public expenditures are negatively correlated with political stability. In parliamentary systems, while economic growth, the rule of law, quality of regulatory reforms, freedom of expression are positively correlated with political stability, there is a negative correlation between inflation, corruption, public expenditures, and political stability.