The Dynamic Effect of Social and Political Instability on Output: The Role of Reforms

Author/Editor:

Lorenzo E. Bernal-Verdugo ; Davide Furceri ; Dominique M. Guillaume

Publication Date:

April 23, 2013

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The aim of this paper is to analyze the dynamic effect of social and political instability on output. Using a panel of up to 183 countries from 1980 to 2010, the results of the paper suggest that social conflicts have a significant and negative impact on output in the short-term with the magnitude of the effect being a function of the intensity of political instability. The results also show that the recovery of output over the medium-term depends on the ability of the country to implement, in the aftermath of a social instability episode, reforms aimed at improving the level of governance. The results are robust to different checks and estimation strategies.

Series:

Working Paper No. 2013/091

Subject:

English

Publication Date:

April 23, 2013

ISBN/ISSN:

9781484381687/1018-5941

Stock No:

WPIEA2013091

Pages:

41

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