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The Political Economy of Development: Empirical Evidence from Fiji


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  • Gounder, Rukmani

    (Massey University)

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    This paper presents an empirical analysis of the impact of political instability on Fiji's economic growth. Fiji experienced two military coups after the 1987 election of the Labour and National Federation Party coalition government. Following the common practice, a "neoclassical" growth model is used to estimate the effect of military coups on Fijis economic growth. The empirical results reveal that short-run and long-run relationship between political instability and economic growth adversely affected the economy. Fiji experienced a decline in exports and in public and private investment, and an outflow of skilled labour in the post coup period. The lack of these factors led to sluggish growth. The direct effect on the marginal productivities of labour, capital and exports indicate that decreases in the marginal productivity are primarily due to capital and labour. The indirect effects of political instability on each of the factors of production reveal that adverse effects of the coups have reduced the availability of factors of production.

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    Bibliographic Info

    Article provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).

    Volume (Year): 29 (1999)
    Issue (Month): 2 ()
    Pages: 133-150

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    Handle: RePEc:eap:articl:v:29:y:1999:i:2:p:133-150

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    Keywords: Coalitions; Development; Election; Government; Growth; Political;

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    Cited by:
    1. Gounder, Rukmani, 2005. "Dimensions Of Conflict And The Role Of Foreign Aid In Fiji," Discussion Papers 23699, Massey University, Department of Applied and International Economics.


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