Social Fractionalization, Political Instability, and the Size of Government

Anthony Annett

No 2000/082, IMF Working Papers from International Monetary Fund

Abstract: This paper explores the relationship between the degree of division or fractionalization of a country’s population (along ethnolinguistic and religious dimensions) and both political instability and government consumption, using a neoclassical growth model. The principal idea is that greater fractionalization, proxying for the degree of conflict in society, leads to political instability, which in turn leads to higher government consumption aimed at placating the opposition. There is also a feedback mechanism whereby the higher consumption leads to less instability as government consumption reduces the risk of losing office. Empirical evidence based on panel estimation supports this hypothesis.

Keywords: WP; standard deviation; growth rate; fractionalization; political economy; size of government; government consumption; government worker; government faction; government purchase; government consumption model; government elite; government crisis; form government consumption equation; nonmilitary government consumption to GDP; utility function; government's choice; Government consumption; Consumption; Terms of trade; Income; Defense spending; East Asia; Africa (search for similar items in EconPapers)
Pages: 30
Date: 2000-04-01
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Citations: View citations in EconPapers (15)

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