Political Stability and Economic Prosperity: Are Coups Bad for Growth?

Klaus Gründler ()

VfS Annual Conference 2020 (Virtual Conference): Gender Economics from Verein für Socialpolitik / German Economic Association

Abstract: We provide evidence that political instability deteriorates economic growth. We establish this result based on panel difference-in-differences strategies and dynamic panel data models using a large sample of 180 countries, a novel geocoded dataset for 2,660 regions, and micro data for about 250,000 households. We exploit coups d'état as a source of exogenous variation in political instability, as they are difficult to anticipate, mirror the political zeitgeist, and reduce measurement error. We use spatial variations and synthetic control methods for identification and find that periods of instability reduce growth by 2-3 percentage points, increase unemployment, and impair health and life satisfaction.

Keywords: Coups d'État; Economic Growth; Political Stability (search for similar items in EconPapers)
JEL-codes: O10 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-gro and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Political Stability and Economic Prosperity: Are Coups Bad for Growth? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc20:224640

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