Economic Security and the Political Governance Crisis in Central African Republic

Abstract

AbstractRecently the Central African Republic (CAR) has been experiencing huge economic insecurity which mostly derives from the political governance crisis that the country has been continuously undergoing since its independence in 1960. This paper examines the relationship between the political governance crisis and economic security in the country, covering the period 1996–2015, using two‐stage instrumental analysis and second order asymptotic tests. The results show that political stability and absence of violence/terrorism, voice and accountability, proxies of political governance crisis played a different role on national income per capita, agricultural raw materials exports, agriculture value added, external balance on goods and services, food exports, food imports, foreign direct investment, GDP growth, GDP per capita growth, wage and salaried workers, industry value added, total natural resources rent and trade, as proxies of economic security. The importance of sustainable political governance stability and the implementation of appropriate reforms at institutional level are preconditions to economic security.