Abstract
This paper analyses the effects of political instability on financial development in the West African Economic and Monetary Union region (WAEMU) countries. The results are obtained using the autoregressive staggered lag model (ARDL) over an analysis period from 2002 to 2021. The main reason for this analysis period is the availability of data. The results show that political instability reduces financial development by lowering financial efficiency. Moreover, inflation tends to increase the negative effects of political instability on financial development. On the other hand, the interest rate manages to mitigate the negative effects of political instability on financial development. The results therefore suggest that measures should be taken to mitigate the risks of political instability. Consequently, the results suggest the development of policies against rising inflation and for the revision of interest rates in order to influence the level of political instability and financial development. © 2024 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
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