Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008
Jacopo Ponticelli () and
No 8513, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. The results show a clear correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the case. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest after austerity measures. Growing media penetration does not strengthen the effect of cut-backs on the level of unrest.
Keywords: demonstrations; Europe; government deficits; instability; public expediture; riots; unrest (search for similar items in EconPapers)
JEL-codes: H40 H50 H60 N14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-his and nep-pol
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Working Paper: Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008 (2012)
Working Paper: Austerity and anarchy: Budget cuts and social unrest in Europe, 1919-2008 (2012)
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