FDI and Elections in Sub-Saharan Africa

In recent decades, Sub-Saharan Africa has experienced significant political and economic liberalisations, and thus foreign direct investment (FDI) is likely to react to the acute policy implications associated with elections. Hence, in the present work, the relationship between FDI and elections is investigated among 37 countries in Sub-Saharan Africa (SSA) over the period 1972–2012. The results of the generalised method of moments (GMM) analysis show that FDI is deterred by both executive and legislative/parliamentary elections, as well as by behavioural unfairness and liberation elections but less affected by perceptual unfairness and post-election violence. Sensitivity analysis further shows that these negative effects are not significantly affected by the extent of resource endowment or political liberalisation.