Political Instability and Economic Growth in the Middle East: Assessing the Economic Cost of Political Turmoil in Selected Countries

Abstract

This study examined the impact of political instability on economic growth in selected Middle Eastern countries, namely Egypt, Jordan, Iraq, Lebanon, Saudi Arabia, and Syria. The study was primarily anchored in Institutional Theory. A qualitative research design was adopted, using thematic analysis of secondary data obtained from the World Bank, International Monetary Fund, and relevant scholarly literature. The findings indicated that political instability was generally associated with weaker economic growth across the selected countries. The major channels identified included reduced domestic and foreign investment, disruption of productive activities, deterioration in institutional quality, human-capital losses, and increased economic uncertainty. The findings further showed that prolonged political instability tends to produce more persistent economic losses, although the magnitude of these effects varied according to institutional quality, economic structure, and the duration of instability. The study concluded that political stability, effective institutions, and a predictable economic environment are important foundations for sustainable economic growth in the Middle East. It therefore recommended strengthening institutional quality and governance, promoting economic diversification, creating a more predictable investment environment, strengthening economic and external buffers, and protecting and supporting investment during periods of instability.