Global uncertainty and economic wellbeing: investigating the role of institutional quality

Abstract

Introduction

It is well known that today’s society is facing a series of challenges that possess considerable implications for both individual and collective well- being. In recent years, humanity has encountered several circumstances, such as geopolitical tensions, climatic challenges, economic and pandemic crises, which have influenced and persisted in influencing and maintaining widespread stress and uncertainty. The negative effects of perceived uncertainty on development and macroeconomic performances have been a subject of interest, as the papers Liu and Gao (2022) and Palmen (2022) highlight, focusing on different states or different country groupings. However, few studies have examined the moderating effect of institutional quality in the uncertainty-growth relationship at the state level. Thus, the novelty of the research lies in examining how public institutions may buffer economies against uncertainty, a topic rarely addressed for emerging economies.