Navigating poverty in developing nations: unraveling the impact of political dynamics on sustainable well-being

Political instability, governance quality, and corruption are key factors distressing poverty. This study examines whether and how political factors—corruption, democracy, governance, and political globalization—affect poverty in developing nations. Using annual data for 24 developing countries from 1997 to 2022, the authors construct two dependent indices via principal component analysis: an income poverty index (poverty headcount and poverty gap) and a human health poverty index (infant and child mortality). Employing Fixed Effects, System GMM, and 2SLS estimators, and accounting for cross-sectional dependence with Driscoll–Kraay standard errors, the results show: governance is significantly associated with both income and human poverty; democracy is negatively and significantly related to income poverty but generally insignificant for human poverty; political globalization is negatively and significantly related to both poverty indices; and corruption is positively and significantly related to both poverty indices.

Yuda Kou, Iftikhar Yasin