Relationship Between Political Instability And Misery: A Structural Var (Svar) Analysis

Political instabilities increase fragility of economies and tarnish country welfare by decreasing their economic growth because they cause economic uncertainties. The objective of the present study was to reveal the effect of political stability on public welfare for Turkish economy. To that end, the relationships between political instability and misery index was investigated through the Structural VAR (SVAR) model for the Turkish economy for the period covering 2002-2022. The findings reveal statistically significant and positive relationships between political stability and misery index in the long run. For the period under analysis, it can be interpreted that the increase in political stability alone is not sufficient to reduce the welfare level of the people. On the other hand, positive and statistically significant relationships are found between the misery index and growth. This finding can be interpreted as the economic growth in the period in question did not lead to an increase in welfare.