The Effect of Political Stability and Democracy on Economic Growth in Selected Countries of the Organization of Islamic Cooperation: Dynamic Panel Approach (SYS-GMM)

The purpose of this study is to investigate the effect of political stability and democracy on economic growth in member countries of the Organisation of Islamic Cooperation (OIC). This study estimated panel regression using a Generalizes Method of Moments (GMM) framework, on a sample of 34 OIC member countries for the period of 1986-2014. In this research, a composite indicator of Internal Conflict, External Conflict, Military in Politics, Ethnic and Religius Tensions Religion in Politics has been used to calculate the political stability index using the principal components analysis method (PCA). The results of the research show that political stability and democracy have a significant positive role in the economic growth.