Investigating the mediating role of political stability in the relationship between poverty and growth

Purpose This study aims to examine the mediating role of political stability in the relationship between economic growth and poverty reduction in the MENA region. While several countries in the region have experienced economic expansion, persistent poverty remains a challenge, often attributed to political instability and weak governance structures. The paper also investigates whether long-term political dominance, despite ensuring stability, may inadvertently hinder inclusive development. Design/methodology/approach Using annual panel data from 13 low- and middle-income Middle East and North Africa (MENA) countries over the period 1996–2022, the study employs the system generalized method of moments (GMM) to estimate the dynamic effects of political stability and absence of violence on the poverty headcount ratio. The analysis also includes a squared term to test for potential non-linear effects. Findings The empirical results suggest that political stability significantly contributes to poverty reduction across the sample. However, the positive and significant coefficient on the squared term indicates a non-linear relationship – suggesting that prolonged political dominance by a single party or coalition may dampen competition, institutional responsiveness and inclusive policymaking, thereby limiting poverty alleviation efforts. Research limitations/implications While this study provides robust evidence on the mediating role of political stability in the poverty–growth nexus in the MENA region, several limitations should be acknowledged. Data constraints, reliance on macro-level indicators and the use of aggregate governance measures may limit the granularity and causal depth of the findings. Additionally, the analysis does not account for subnational variations, regime types or the impact of external shocks such as climate and geopolitical instability. Future research could address these gaps by employing micro-level data, exploring institutional heterogeneity and adopting advanced causal inference methods. Originality/value While existing literature often highlights the roles of financial development and economic growth in poverty reduction, this study provides novel insights into how political stability – particularly in fragile or transitioning states – acts as a critical governance factor. The findings underscore the importance of balanced and accountable political systems in enhancing the poverty-reducing impact of growth within the MENA region.