Sociopolitical Instability and Capital Accumulation in Developing Countries: Cross Country pooled data Evidence

Abstract

This study shows that sociopolitical conflicts measured by peace building capacity in developing countries affect physical and human capital accumulation in selected 70 developing countries from all regions of the world during 2000-2004 by using econometric models. We conclude that sociopolitical instability negatively and significantly effect both physical and human capital accumulation in selected countries. Sociopolitical stability in developing countries by increasing peace building capacity is a necessary condition for accumulation of both, physical and human capital. Further this study found that a positive relationship between democracy and peace building capacity. More democracy in developing countries leads for promotion of peace building capacity and sociopolitical stability. Capital accumulation which is key source of economic growth is adversely affected by conflict and war in developing countries.