consequences of political instability
Aghion, P. and Durlauf, P., Amsterdam: Elsevier, 385 – 472. Acemoglu, D., Johnson, S., Robinson, J. and Thaicharoen, Y. G. F. (2007). Quarterly Journal of Economics, 100: 1169 – 1190. Journal of Economic Literature, 40: 837 – 880. Journal of Money, Credit, and Banking, 30: 218 – 230. 4 The periods are: 1960–64, 1965–69, 1970–74, 1975–79, 1980–84, 1985–89, 1990–94, 1995–99, and 2000–04. ... ‘Walls Often Fail; They Have Unintended Consequences’ Kenneth R. Rosen Wired May 2, 2019. You can help correct errors and omissions. ", Hasim Akça & Ahmet Yilmaz Ata & Coskun Karaca, 2012. Murphy, K. M., Shleifer, A., and Vishny, R.W. Political instability, stemming from rapid decentralization of the Indonesian government, is the cause of the declining orangutan populations. Qayyum, A., Khawaja, M. I., and Hyder, A. Corruption and Military Spending. Pakistan Development Review, 48: 269 – 289. Also, the occurrence of a government change increases the likelihood of subsequent changes. (1987). Public expenditure, corruption, and economic growth: the case of Italy. http://www.pide.org.pk/pdf/PDR/2011/Volume4/773-807.pdf, Consequences of Political Instability, Governance and Bureaucratic Corruption on Inflation and Growth: The Case of Pakistan, The Optimal Degree of Commitment to an Intermediate Monetary Target, A Positive Theory of Monetary Policy in a Natural Rate Model, A Positive Theory of Monetary Policy in a Natural-Rate Model, Rules, discretion and reputation in a model of monetary policy, Rules, Discretion and Reputation in a Model of Monetary Policy, Does Institutions Effect Growth in Pakistan? Power Dynamics, Institutional Instability and Economic Growth: The Case of Pakistan. Membership. Sharp analyses of topical news from a political science perspective, research summaries and the latest expert thinking in a blog format. as Romer, Paul M, 1986. Competitive Externalitties and Optimal Seigniorage. It also allows you to accept potential citations to this item that we are uncertain about. Political instability is defined as the process whereby the political life or atmosphere of a country or nation suddenly changes or fails. The analysis of the consequences of socio-political instability has been a central theme in recent macroeconomic research, in general, and in the economic growth literature, in particular.There are two different views on the nature of the relationship between political instability and growth. Are they in the data and do markets know it? A comparison of Pakistan’s economic performance during different regimes shows that macroeconomic fundamentals tend to show an improvement during the autocratic regimes as compared with those prevailing during democratic regimes. "Consequences of Political Instability, Governance and Bureaucratic Corruption on Inflation and Growth: The Case of Pakistan," MPRA Paper 35584, University Library of Munich, Germany. ", Muhammad Ali Choudhary & Muhammad Nadim Hanif & Sajawal Khan & Muhammad Rehman, 2010. ", Aisen, Ari & Veiga, Francisco Jose, 2006. ", Robert E. Hall & Charles I. Jones, 1999. Why do some countries produce so much more output per worker than others? The consequences of the social instability during the 1920s and early 1930s were significant. ", Cosslett, Stephen R. & Lee, Lung-Fei, 1985. ", Tabellini, Guido & Alesina, Alberto, 1990. For example, the economic indicators of the Zimbabwe indicate that the rate of inflation is so high that it has led to erosion of capital of the banks in the country. Corruption, Public Investment, and Growth. Elections and Macroeconomic Policy Cycles. Corruption and Inflation. How Taxing is Corruption on International Investors? Tanzi, V., and Davoodi. Hall, R. E., and Jones, C. I. Effect of Corruption on Tax Revenues in the Middle East. NBER working paper: 15902. Blackburn, K., and Sarmah, R. (2008). Baumol, W.J. The purpose of this paper is to empirically determine the effects of political instability in Pakistan within compared with India and China. Journal of International Economics, 70: 239 – 252. ", Keith Blackburn & Rashmi Sarmah, 2005. Gupta S., Davoodi, H. and Tiongson E. (2000). ", Goldfeld, Stephen M. & Quandt, Richard E., 1973. Nordhaus, W. D. (1975). ", Alex Cukierman & Sebastian Edwards & Guido Tabellini, 1989. Monetary policies for developing countries: The role of institutional quality. There are a number … Consequences of Uncontrolled Coronavirus: Political Instability and Social Unrest. (1991). All material on this site has been provided by the respective publishers and authors. Economics of Governance, 9: 341-362. ", Blackburn, Keith & Forgues-Puccio, Gonzalo F., 2007. To prove this I perform a two country comparison on Indonesia and Malaysia, focusing on three specific regions; Aceh and Kalimantan, Indonesia and … ", Barro, Robert J. International Research Journal of Finance and Economics, 56: 179 – 192. Please note that corrections may take a couple of weeks to filter through Political instability has become a serious problem especially for the developing and underdeveloped countries. This cannot but contribute to the entire area’s depressed GDP and resultant political instability. Political uncertainty then is not simply media fodder but has wide-ranging and uncertain real world consequences. natural and human-made (FAO/WFP, 2010). An Empirical investigation, Effect of Corruption on Tax Revenues in the Middle East, Review of Middle East Economics and Finance, Political Parties and Macroeconomic Policy, Corruption's Effect on Growth and its Transmission Channels, Institutional causes, macroeconomic symptoms: volatility, crises and growth, Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth, Does Political Instability Lead to Higher Inflation? ", Tabellini, Guido & Alesina, Alberto, 1990. Time Series Analysis. ", Robert J. Barro & David B. Gordon, 1981. ", Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1990. Growth Diagnostic in Pakistan, European Journal of Scientific Research, 24: 433 – 450. Political risk is that a country will make political decisions that have adverse effects on corporate profits, including micro and macro risk. Jones, C.I. Aisen, A., and Veiga, F. J. ", Danish Ahmed Siddiqui & Qazi Masood Ahmed, 2019. An empirical investigation. Does Political Instability Lead to Higher Inflation? The Quarterly Journal of Economics, 110: 681 – 710. If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. The resultant negative consequences of political instability in the African countries are the increase of inflation. High and Uncertain Inflation: Results from a new dataset. The Incidence and Persistence of Corruption in Economic Development. Using annual data from 1950 to 2011, computational modelling is carried out by applying Markov-Regime switching technique with maximum-likelihood procedures. This sudden change can leave citizens in doubt about their nation's situation and may lead to revolt. ", Muhammad Zakaria & Bashir Ahmed Fida, 2009. (2005). Government Spending and Inflationary Finance: A Public Finance Approach. Past famines in Ethiopia (1972 73 and 1984 For example, the economic indicators of the Zimbabwe indicate that the rate of inflation is so high that it has led to erosion of capital of the banks in the country. (Monetary Policy Department at State Bank of Pakistan), (Pakistan Institute of Development Economics, Islamabad). ", Drazen, Allan & Alesina, Alberto, 1988. ", Robert J. Barro & Xavier Sala-i-Martin, 1990. Unpublished memo, Department of Economics, University of Karachi, Pakistan. Tjøstheim, D. (1986). Qureshi, M. N., Ali, K., and Khan, I. R. (2010). By itself, unemployment cannot explain the occurrence of political violence and armed conflict. American Economic Review, 81: 1170 – 1188. European Journal of Political Economy, 17: 749-777. Cukierman, A., Edwards, S., and Tabellini, G. (1992). This problem is associated with a series of problems in various fields. Iqbal, N., Khan, S. J. I., and Irfan, M. (2008). On some economic consequences of political instability - This article considers the channels through which political uncertainty, a global epidemic of … A Panel Data Analysis. Cambridge: Cambridge University Press. H. R. (1997). ", Barro, Robert J & Gordon, David B, 1983. (2008). ", Francisco José Veiga & Ari Aisen, 2006. Why do Some Countries Produce So Much More Output Per Worker than Others? Francq, C., and Zakoïan, J. M. (2001). Reinikka, R., and Svensson, J. 12 December 2011 Political instability tends to be persistent. ", Alesina, Alberto & Drazen, Allan, 1991. Edwards, S., and Tabellini, G. (1991). Gupta, S., de Mello, L., and Sharan, R. (2001). Barro, R. J., and Gordon, D. B. Businesses operate according to forecasts and scenarios about the future that comprise surprises as well as certainties. Corruption and Growth. Corruption, Growth, and Public Finances. Institutions, institutional change and economic performance. Political instability is an enormous threat to the success of companies operating in the global supply chain arena. Seigniorage and Political Instability. The French Revolution began in 1789 with the Taking of the Bastille. The causes and consequences of the French Revolution They reflect the convulsive society of the time. This study contributes to the literature on political instability and economic growth by specifically investigating the impact of political instability on the economic growth of member countries of the Economic Community of West African States (ECOWAS). Rogoff, K. (1985). Organizations with global sourcing needs must understand the potential negative impact political instability can have on productivity, quality, and relationships and create strategies to mitigate risk. Political instability is an enormous threat to the success of companies operating in the global supply chain arena. Huang, H., and Wie, Shang-Jin. A second is to focus on the incidence of political upheaval or violence in a society, such as assassinations, demonstrations, and so forth. Find out more about our Blog. References listed on IDEAS. Blackburn, K., and Forgues-Puccio. Putterman Louis Reward Structures and the Allocation of Talent. Unpublished memo, Department of Economics, University of Karachi, Pakistan. Engel, c. and Hamilton, J. D. (1990). West Africa is regarded as the riskiest sub-region within the African continent. ", Daron Acemoglu & Simon Johnson & James Robinson & Yunyong Thaicharoen, 2002. American Economic Review, 83: 409 – 414. Choudhary, M. A., Hanif, M. N., Khan, S., and Rehman, M. (2010), Procyclical Monetary Policy and Governance. This sudden change can leave citizens in doubt about their nation's situation and may lead to revolt. Economic Letters, 113: 225 – 227. D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption, O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O42 - Monetary Growth Models, E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation, H - Public Economics > H6 - National Budget, Deficit, and Debt, https://mpra.ub.uni-muenchen.de/id/eprint/35584, Consequences of Political Instability, Governance and Bureaucratic Corruption on Inflation and Growth: The Case of Pakistan, Political Instability; Governance; Corruption; Inflation; Growth. Panel Number: 74 Panel Chair. ", Del Monte, Alfredo & Papagni, Erasmo, 2001. Review of Economics and Statistics, 82: 1 – 11. Some Doubly Stochastic Time Series Models. Political instability occurs when there is a sudden change. This cannot but contribute to the entire area’s depressed GDP and resultant political instability. Section Institutions and Decision-Making. This paper presents a theoretical model with micro-foundations that captures some important features of Pakistan‘s economy which have emerged in sixty-four years of its history. Romer, P. (1986). Inflation and Political Instability in Eight Latin American Countries. William Davidson Institute Working Papers Series, The Allocation of Talent: Implications for Growth, The Allocation of Talent: Implicationsfor Growth, University of Chicago - George G. 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Working Paper No. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:50:y:2011:i:4:p:773-807. Political Instability Political instability in home countries makes people to loose confidence in their governments and future prospects for a better life. Distribution and Development in a Model of Misgovernance. Ed. Organizations with global sourcing needs must understand the potential negative impact political instability can have on productivity, quality, and relationships and create strategies to mitigate risk. Working Paper No.135, International Monetary Fund. (1991). (2005). Federal Reserve Bank of Minneapolis Quarterly Review, 19: 2 – 11. contemporaneous political instability, this econometric method allows for the calculation of the causal effect of political instability on growth independent of the feedback effect of growth on political instability. that political instability results in fiscal deficits, and this happens because political instability gives the government an incentive to implement a myopic fiscal policy in order to increase its chances of remaining in office. Economic Growth in a Cross Section of Countries. ", Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. Mauro, P. (1995). In America: * Get money out of politics. See general information about how to correct material in RePEc. Sometimes, natural disasters can be a source of significant political instability such as the 2010 Haiti earthquake. Imam, P. A. and Jacobs, D. F. (2007). A first approach is to define it as the propensity for regime or government change. ", Choudhary, M. Ali & Hanif, M. Nadim & Khan, Sajawal & Rehman, Muhammad, 2010. Baumol, W.J. R & D Based Models of Economic Growth. (2000). Public Choice, 135: 207 – 223. 270, International Monetary Fund. This problem is associated with a series of problems in various fields. If that happens then Pakistan would suffer immensely giving birth to a whole host of new political and socio-economic restrictions for the whole nation. Stationarity of Multivariate Markov-Switching ARMA Models, Journal of Econometrics, 102: 339 – 364. ", Safdar Ullah Khan & Omar Farooq Saqib, 2009. Political instability can be defined in at least three ways. Working Paper No. ", Muhammad Ali Choudhary & Muhammad Nadim Hanif & Sajawal Khan & Muhammad Rehman, 2012. ", Engel, Charles & Hamilton, James D, 1990. Also, the occurrence of a government change increases the likelihood of subsequent changes. (1992). Like a wild bushfire, the trapping of political power by military officers swept Africa. The above studies are mostly empirical in nature and lack theoretical foundations without which it is difficult to explain how governance, democracy, political instability… Political Business Cycle. If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. Economic Policy, 4: 57-98. Pakistan Development Review, 48: 241 – 267. Khan, S. U., and Saqib, O. F. (2011), Political Instability and Inflation in Pakistan. Using annual data from 1950 to 2011, computational modeling is carried out by applying Markov-Regime switching technique with maximum-likelihood procedures. (1991). (2010). Political instability can be the consequence of either kind of disaster. Public profiles for Economics researchers, Various rankings of research in Economics & related fields, Curated articles & papers on various economics topics, Upload your paper to be listed on RePEc and IDEAS, RePEc working paper series dedicated to the job market, Pretend you are at the helm of an economics department, Data, research, apps & more from the St. Louis Fed, Initiative for open bibliographies in Economics, Have your institution's/publisher's output listed on RePEc. Increasing Returns and Long-Run Growth. the various RePEc services. The resulting political instability could further bring Pakistan closer to being placed on the FATF black-list. ", Alesina, Alberto F & Tabellini, Guido, 1988. Haider, Adnan and Din, Musleh ud and Ghani, Ejaz Civil wars, political instability, and poverty kill millions of people every year. Acemoglu, D. (1995). Journal of Political Economy, 91: 589 – 610. It has been a major hurdle in the development of Pakistan. Consequences of Political Instability, Governance and Bureaucratic Corruption on Inflation and Growth: The Case of Pakistan Haider, Adnan and Din, Musleh ud and Ghani, Ejaz (2011): Consequences of Political Instability, Governance and Bureaucratic Corruption on … Corruption, Monetary Policy and Inflation: A Cross Country Examination. Why are stabilization delayed? It gives rise to many other issues including poverty, injustice, corruption, lack of competence and literacy rate. On some economic consequences of political instability - This article considers the channels through which political uncertainty, a global epidemic of late, affects the economy, often with far reaching effects. Ghura, D. (1998). Instability as a result of high rates of youth unemployment does not aim to change the political regime but can lead to anti-government demonstrations. Political instability occurs when there is a sudden change. The main reason for political instability, imo, is the system of legalized corruption we have in place in the U.S. (2011). Threshold Effects in the Relationship between Inflation and Growth. Democracy, Autocracy and Macroeconomic Performance in Pakistan. Timeline: the Rise, Spread, and Fall of the Islamic State. The Review of Economic Studies, 59: 645 – 661. Rahmani, T., and Yousefi, H. (2009). FRBC Economic Review, 36, 22 – 32. (2000). The Quarterly Journal of Economics, 106: 503 – 530. 37, State Bank of Pakistan. Political Instability, Political Freedom and Inflation. Membership. Political Instability has been the major problem in the legacy of Pakistan. Al-Marhubi, F. A. Public Choice, 52: 143 – 168. The Allocation of Talent: Implications for Growth. Political Instability and the Concept of Democraticization In Africa The other consequences, such as the start of Pacific War, the Allied Occupation, were mainly the result of the rise of militarists. (2006). ", Abdul Qayyum & Idrees Khawaja & Asma Hyder, 2008. The aim of the present study was to explore the causes and consequences of political instability in Balochistan. ", Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2009. (1983b). ", By Mohsin S. Khan & Abdelhak S. Senhadji, 2001. Tanzi, V., and Davoodi. Political instability can be caused by many factors, including conflict between rival parties, insufficient resources and the proximity to other nations in conflict. natural and human-made (FAO/WFP, 2010). Fischer, S., Sahay, R., and Vegh, C. (2002). North, D. C. (1990). ", Robert E. Hall & Charles I. Jones, 1999. Political instability can be the consequence of either kind of disaster. (2006). On Entrepreneurship, Growth and Rent-seeking: Henry George Updated. The standard definition of political instability is the propensity of a government collapse either because of conflicts or rampant competition between various political parties. The most significant one was the rise of the militarists. ", Abdelhak S Senhadji & Mohsin S. Khan, 2000. Aizenman, J. Phelps, E. (1973). European Journal of Political Economy, 17: 1 – 16. Carlstrom, C., and Fuerst, T. (2000). The estimation results based on empirical modelling setup are supportive of the above stylised-facts and also confirm the implications of the theoretical model. The Quarterly Journal of Economics, 106: 407 – 443. Just as there are a number of definitions of political instability, there are also a number of indices designed to measure the level of political instability in countries. General contact details of provider: http://edirc.repec.org/data/pideipk.html . Journal of Political Economy, 85: 473 – 493. Han Dorussen. Zaidi, S. A. Alesina, A., and Drazen, A. Political instability was accentuated by military intervention into the politics and governance of the countries. (1990). European Economic Review, 39: 17 – 33. (2005). Panel Co-Chair. Barro, R. J., and Gordon, D. B. If not, a vicious cycle of instability and uncertainty will most likely persist for decades—with tragic consequences. Voting on the budget deficit. ", Iqbal, Nasir & Khan, Sardar Javaid Iqbal & Irfan, Muhammad, 2008. ", Stanley Fischer & Ratna Sahay & Carlos A. Vegh, 2002. In contrast, the economic performance during the democratic regimes has been observed to worsen with weak governance and high levels of corruption, high inflation due partly to reliance on seigniorage to finance public spending, and lackluster growth. Working Paper No. Consequences of Political Instability, Governance and Bureaucratic Corruption on Inﬂation and Growth: The Case of Pakistan Haider, Adnan and Din, Musleh ud and Ghani, Ejaz Monetary Policy Department, State Bank of Pakistan, Karachi, Pakistan, Pakistan Institute of Development Economics, Islamabad, Pakistan. Cosslett, S. R., and Lee, L. F. (1985). 50(4), pages 773-807. The problem of political instability generates more serious for a society which is multi Why is Rent-Seeking so Costly to Growth? Political instability can be caused by many factors, including conflict between rival parties, insufficient resources and the proximity to other nations in conflict. Bernard Steunenberg. Conflicts and political instability can have a negative impact on the productive capacity of a country and this in turn can reduce government revenue and increase unproductive spending, including military expenditures, leading to fiscal crises. Political instability has become a serious problem especially for the developing and underdeveloped countries. The standard definition of political instability is the propensity of a government collapse either because of conflicts or rampant competition between various political parties. Journal of Political Economy, 103: 759 – 84. Backus, D., and Driffill, J. Rogoff, K., and Sibert, A. (1985). Institutional causes, macroeconomic symptoms: volatility, crises and growth. ", Stanley Fischer & Ratna Sahay & Carlos A. Végh Gramont, 2002. Our members are universities across the globe and the scholars who work and study within them; membership benefits both the individual and the institution. These are individuals who may have difficulties because of their ethnic, cultural, religion belongings or being a member of opposition political groupings in their home countries. ", Imam Patrick Amir & Jacobs Davina, 2014. Reforming institutions: Where to Begin? (1995). The Review of Economic Studies, 42: 169 – 190. GDP growth, inequality and inflation are determinants of political instability and unemployment. A. By using the standard deviation and co- Serial Correlation in Discrete Variable Models. Alesina, A., and Tabellini, G. (1990). In (Eds), Handbook of Economic Growth. Pellegrini, L., and Gerlagh, R. (2004). Princeton, NJ: Princeton University Press. Davis, G., and Kanago, B. ", Blackburn, Keith & Bose, Niloy & Emranul Haque, M., 2006. Economic Letters, 66: 199 – 202. political instability (where political instability is defined as frequent cabinet changes and government in crises) on inflation in Pakistan. Africa is naturally rich with resources like minerals, gems, rubber, radioactive elements, foodstuff, etc. H. R. (2000). Politics and Business Cycles in Industrial Democracies. ", Khan, Safdar Ullah & Saqib, Omar Farooq, 2011. Departments of Political Science and Public Administration, Universiteit Leiden. The type of political regime has no impact on the growth of national income, and political instability affects growth only in dictatorships. Political instability proved to be the most stubborn, with average recovery times of 22.2 months and a minimum of 10 months. Long Swings in the Dollar: Are They in the Data and Do Markets Know It? Political instability tends to be persistent. ", Alesina, Alberto & Drazen, Allan, 1991. ", Blackburn, Keith & Forgues-Puccio, Gonzalo F., 2005. Corruption, Inflation and Growth. The estimation results based on empirical modeling setup are supportive of the above stylized-facts and also confirm the implications of the theoretical model. The consequences of this bubble were severe for Spain. ", M. Idrees Khawaja & Sajawal Khan, 2009. A. Murphy, K. M., Shleifer, A., and Vishny, R.W. ", Acemoglu, Daron & Johnson, Simon & Robinson, James A & Thaicharoen, Yunyong, 2002.
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