Tightening Tensions: Fiscal Policy and Civil Unrest in Eleven South American Countries, 1937 - 1995
AbstractEfforts at fiscal consolidation are often limited because of concerns over potential social unrest. From German austerity measures during the 1930s to the violent demonstrations in Greece in 2010, hard times have tended to go hand in hand with antigovernment violence. In this paper, I assemble cross-country evidence from eleven South American countries for the period 1937 to 1995 about the extent to which societies become unstable after budget cuts. The results show a clear positive correlation between austerity and instability. I examine the extent to which this relationship simply captures the fact that fiscal retrenchment and economic slumps are correlated, and conclude that this is not what is driving the effect. Finally, I test for interactions with various economic and political variables. While autocracies and democracies show a broadly similar response to budget cuts, countries with a history of stable institutions are less likely to see unrest as a result of austerity measures.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 612.
Date of creation: Feb 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-HIS-2011-04-23 (Business, Economic & Financial History)
- NEP-LAM-2011-04-23 (Central & South America)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Francesco Passarelli & Guido Tabellini, 2013.
"Emotions and Political Unrest,"
474, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Ponticelli, Jacopo & Voth, Hans-Joachim, 2011.
"Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008,"
CEPR Discussion Papers
8513, C.E.P.R. Discussion Papers.
- Jacopo Ponticelli & Joachim Voth, 2011. "Austerity and anarchy: Budget cuts and social unrest in Europe, 1919-2008," Economics Working Papers 1342, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2012.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sepulveda).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
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. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.