Abstract
This article uses statistical methods to examine the relationship between two key macroeconomic indicators—inflation and economic growth—and four measures of political instability—peaceful unrest, violent unrest, coups d’etat, and changes of government. Using a panel research design and fixed effects regression analysis, I examine first whether contemporaneous relationships exist between these two groups of variables and then the direction of causality between them. Peaceful unrest clearly produces higher inflation and slower growth. Oddly, coups d’etat seem to producelower inflation, and there is some evidence that reverse causation may operate here as well—that high inflation mayreduce the likelihood of coups. Slow economic growth is associated with higher levels of violent unrest and a higher likelihood of coups and changes of government, but the direction of causality in these relationships is not clear. These findings, taken together, suggest that the relationship between macroeconomic conditions and political instability runs primarily from the latter to the former, raising doubts about the widely held view that poor economic conditions generally produce unrest and instability.
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Mark J. Gasiorowski is an Associate Professor in the Department of Political Science at Louisiana State University. He is currently working on a project focusing on the relationship between democracy and macroeconomic conditions.
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Gasiorowski, M.J. Macroeconomic conditions and political instability: An empirical analysis. St Comp Int Dev 33, 3–17 (1998). https://doi.org/10.1007/BF02687489
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DOI: https://doi.org/10.1007/BF02687489