Political instability and informality in Uganda: An empirical analysis

In this paper, we analyzed the long-run relationship between political instability and shadow economy in Uganda using autoregressive distributed lag bounds testing approach to cointegration. We found a negative statistically significant economy, both short-run. This implies that an improvement processes creates stability incumbent regime significantly reduces consistent with view institutions play crucial role facilitating processes, which turn reinforce allocation of economic resources provision public goods services improve welfare citizens. makes it less attractive for citizens operate as formal can now provide much needed services. The practical implication these results is any attempts by policy makers reduce activities should also involve reforming system encouraging civic engagement elites citizenry or voters. Additionally, formulate policies functioning independent interference from rent-seeking behavior.