Sounding the alarm: Impact of political instability on growth and fiscal health of the Indian economy

Mala Lalvani

Economics of Governance, 2003, vol. 4, issue 2, 103-114

Abstract: A noticeable change evident in the Indian political scenario since the eighties has been a sharp rise in the frequency with which governments have been ousted out of power. This augurs well for Indian democracy as it reflects a ‘political awakening’. Such changes in government, after an election reflect ‘orderly’: transfer of power and are inherent to the democratic form of governance. However, a close scrutiny of the political scenario at the state government level shows that there have been very frequent changes in government between elections. A high frequency of changes in government could be expected to result in frequent reversals or modifications in policy decisions and have a destabilizing effect on the economy. The present study is an empirical exercise undertaken at the level of state governments. It makes a first attempt to examine the impact of political instability on growth and on the fiscal health of the Indian economy. Copyright Springer-Verlag Berlin Heidelberg 2003

Keywords: Key words: Political instability; government growth; fiscal policy; JEL classification: H11; E62; C33 (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:spr:ecogov:v:4:y:2003:i:2:p:103-114

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DOI: 10.1007/s101010200047

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