Economic Shocks and Political Transitions

Title

Economic Shocks and Political Transitions

Files

Research Question

Economic downturns have often been linked to political transitions. For example, the 1980s debt crisis and the Southeast Asian financial crisis of 1997-98 appeared to discredit the incumbent autocracies, galvanize the citizens, and promote democratization in Latin America and Indonesia. If this is a general pattern, then the continuing low oil prices and the slowing Chinese economy may lead to democratic reforms in the Middle East and East Asia in the near future. Nonetheless, autocracies under threat may resort to repression, as in Bahrain, Saudi Arabia, and Syria during the Arab Spring. Economic downturns have further been linked to coups, as in Africa in the 1970s, and the rise of extremist governments, as in Nazi Germany. In this study, we estimate the effects of economic downturns - measured via declines in international commodity export relative to import prices and the economy’s growth rate - on the likelihood of transitioning into and out of democracy.

Award

CGS Research Excellence Award

Significance

The study can potentially explain the long-run distribution and stability of political systems, which may, in turn, affect the wellbeing of both their own citizens and citizens elsewhere due to migration, refugee, trade, investment, environmental, disease, conflict, terrorism, and other spillovers from autocratic states. The findings can potentially also help international policy making bodies that wish to be able to predict and play a positive role during episodes of political turmoil.

Methods Used

We use a quantitative (multivariate regression) research design based on international commodity price, country specific trade and economic growth data, as well as a variety of democracy measures and several case study analyses, which we use to support the interpretation of the statistical evidence.

Conclusions/Outcomes

The preliminary findings suggest that economic downturns destabilize autocracies and promote transitions into democracy. However, we also find some (much more limited) evidence that economic downturns may destabilize democracies. Thus, it is possible that economic downturns generally destabilize the political status quo.

Publication Date

2016

Economic Shocks and Political Transitions

Share

 
COinS