Social Fractionalization, Political Instability, and the Size of Government
April 1, 2000
Download PDF
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: 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
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.
Subject: Consumption, Defense spending, Expenditure, Government consumption, Income, International trade, National accounts, Terms of trade
Keywords: Africa, Consumption, Defense spending, East Asia, form government consumption equation, fractionalization, government consumption, Government consumption, government consumption model, government crisis, government elite, government faction, government purchase, government worker, government's choice, growth rate, Income, nonmilitary government consumption to GDP, political economy, size of government, standard deviation, Terms of trade, utility function, WP
Pages:
30
Volume:
2000
DOI:
Issue:
082
Series:
Working Paper No. 2000/082
Stock No:
WPIEA0822000
ISBN:
9781451850437
ISSN:
1018-5941
