Political Instability and Economic Growth

Alberto Alesina, Sule Ozler, Nouriel Roubini, Phillip Swagel

NBER Working Paper No. 4173
Issued in September 1992
NBER Program(s):   EFG   IFM   ITI

This paper investigates the relationship between political instability and per capita GDP growth in a sample of 113 countries for the period 1950-1982. We define ?political instability? as the propensity of a government collapse, and we estimate a model in which political instability and economic growth are jointly determined. The main result of this paper is that in countries and time periods with a high propensity of government collapse, growth is significantly lower than otherwise. This effect remains strong when we restrict our definition of ?government change? to cases of substantial changes of the government.

(5873 K)

Published: Journal of Economic Growth, vol.1, no.2, pp. 189-212, June 1996.

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