Beyond stability: A study of the impact of politics on foreign direct investment in Mali (2002-2022)

  • Etienne Fakaba SISSOKO Faculty of Economics and Management of Bamako, University of Social Sciences and Management, Mali https://orcid.org/0009-0005-9538-5912
  • Daman-Guilé DIAWARA Faculty of Economics and Management of Bamako, University of Social Sciences and Management, Mali
  • Madiouma KONE Faculty of Economics and Management of Bamako, University of Social Sciences and Management, Mali
  • Khalid DEMBELE Faculty of Economics and Management of Bamako, University of Social Sciences and Management, Mali

Abstract

This study examines the impact of politics on Foreign Direct Investment (FDI) in Mali from 2002 to 2022, a period characterized by significant political and economic transformations. The main objective is to determine the extent to which political stability influences FDI flows in a developing African context.

Methodologically, this research adopts a mixed approach. It utilizes an Auto-Regressive Distributed Lag (ARDL) model for quantitative analysis of macroeconomic data, and a series of semi-structured interviews with 20 key stakeholders, including business leaders, economists, and policymakers, for in-depth qualitative exploration.

The findings reveal that, contrary to expectations, an improvement in political stability does not necessarily correlate with an increase in FDI. In fact, better political stability was correlated with a decrease in long-term FDI, suggesting that investors may favor markets with a certain degree of risk. Additionally, the population (POP) emerged as a constraint on FDI, highlighting the importance of labor quality and internal market development policies.

This study enriches the existing literature on FDI in developing countries by providing insights into the complex interplay between politics, economy, and foreign investments in a specific African country. It underscores the importance for policymakers to adopt a holistic approach to attract FDI, going beyond political stability and incorporating economic policies and human capital development.

 

Keyboard: Foreign Direct Investment; Political Stability; Mali; Democracy; Economic Development

Classification JEL : F21 ; O1 ; P16 ; F23 ; F63

Type of Article : Empirical Research

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Author Biography

Etienne Fakaba SISSOKO, Faculty of Economics and Management of Bamako, University of Social Sciences and Management, Mali
Dr Etienne Fakaba SISSOKO is a graduate of the Pontifical Institute of Arab Studies and Islamology (PISAI) in Rome (Italy) and the Institute of Islamic-Christian Training (IFIC) in Bamako (Mali). He is also Professor of Macroeconomics at the Faculty of Economics and Management in Bamako. Former Advisor in charge of economic issues at the Presidency of the Republic (Mali).
Published
2024-03-16
How to Cite
SISSOKO, E. F., DIAWARA, D.-G., KONE, M., & DEMBELE, K. (2024). Beyond stability: A study of the impact of politics on foreign direct investment in Mali (2002-2022). International Journal of Accounting, Finance, Auditing, Management and Economics, 5(3), 258-283. https://doi.org/10.5281/zenodo.10799041
Section
Articles