Political growth collapses

Francisco Rodríguez () and Patrick Imam ()
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Francisco Rodríguez: University of Denver
Patrick Imam: Joint Vienna Institute

Public Choice, 2025, vol. 205, issue 1, No 8, 183-217

Abstract: Abstract Economic collapses can result from political actors adopting strategies that generate severe negative economic externalities for society. This paper establishes the conditions under which peacetime political conflict becomes economically destructive and identifies the settings where the breakdown of conflict-management arrangements leads to economic implosions. We show that politically driven collapses are characterized by high contestation of power, significant declines in productivity, increases in short-term policy biases, and substantial externalities arising from political strategies. We argue that these dynamics were satisfied in two of the largest peacetime collapses in modern history: Venezuela (2012–2020) and Zimbabwe (1997–2008). Our theory of economic collapses highlights the role of intra-elite political conflict, providing a contrast to the class-conflict emphasis of much of the existing literature.

Keywords: Economic growth; Growth collapses; Venezuela; Zimbabwe; Political economy; Appropriation (search for similar items in EconPapers)
JEL-codes: D72 D74 O11 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11127-025-01290-5

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