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Long Live Democracy: The Determinants of Political Instability in Latin America

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  • Luisa Blanco
  • Robin Grier

Abstract

We investigate the underlying causes of political instability in a panel of 18 Latin American countries from 1971-2000. We test whether regime type, regime durability, factionalism, income inequality, ethnic diversity, ethnic discrimination, regional spillover effects, urban growth and macroeconomic variables matter for instability. We find several important results: (1) democracy has a significant negative effect on instability that is robust to several alternative specifications; (2) factionalised political systems experience higher instability; (3) income inequality, ethnic fractionalisation, and urban growth have important nonlinear effects on instability; and (4) of the macroeconomic variables we study, only openness to trade has a significant negative effect on instability.

Suggested Citation

  • Luisa Blanco & Robin Grier, 2009. "Long Live Democracy: The Determinants of Political Instability in Latin America," Journal of Development Studies, Taylor & Francis Journals, vol. 45(1), pages 76-95.
  • Handle: RePEc:taf:jdevst:v:45:y:2009:i:1:p:76-95
    DOI: 10.1080/00220380802264788
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    References listed on IDEAS

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    1. Odedokun, Matthew & Round, Jeffery I., 2001. "Determinants of Income Inequality and its Effects on Economic Growth: Evidence from African Countries," WIDER Working Paper Series 103, World Institute for Development Economic Research (UNU-WIDER).
    2. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    3. World Bank, 2005. "World Development Indicators 2005," World Bank Publications, The World Bank, number 12426.
    4. Anthony M Annett, 2000. "Social Fractionalization, Political Instability, and the Size of Government," IMF Working Papers 00/82, International Monetary Fund.
    5. repec:wbk:wbpubs:12425 is not listed on IDEAS
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    Cited by:

    1. Asongu, Simplice & Acha-Anyi, Paul, 2017. "The Murder Epidemic: A Global Comparative Study," MPRA Paper 85486, University Library of Munich, Germany, revised Jan 2018.
    2. Jean P. Sepúlveda & Claudio A. Bonilla, 2014. "The factors affecting the risk attitude in entrepreneurship: evidence from Latin America," Applied Economics Letters, Taylor & Francis Journals, vol. 21(8), pages 573-581, May.
    3. Akhtaruzzaman, M. & Berg, Nathan & Hajzler, Christopher, 2017. "Expropriation risk and FDI in developing countries: Does return of capital dominate return on capital?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 84-107.
    4. Jammazi, Rania, 2012. "Oil shock transmission to stock market returns: Wavelet-multivariate Markov switching GARCH approach," Energy, Elsevier, vol. 37(1), pages 430-454.
    5. repec:kap:itaxpf:v:24:y:2017:i:3:d:10.1007_s10797-016-9428-x is not listed on IDEAS
    6. Mukherjee, Deepraj, 2015. "Did pre-WTO agreements curb corruption?," Economic Analysis and Policy, Elsevier, vol. 47(C), pages 1-10.
    7. Nabamita Dutta & Deepraj Mukherjee, 2016. "Do Literacy And A Mature Democratic Regime Cure Corruption?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 1-26, June.
    8. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Aid and institutions in transition economies," European Journal of Political Economy, Elsevier, vol. 38(C), pages 55-70.
    9. Gurgul, Henryk & Lach, Łukasz, 2012. "Political instability and economic growth: Evidence from two decades of transition in CEE," MPRA Paper 37792, University Library of Munich, Germany.
    10. repec:jed:journl:v:43:y:2018:i:1:p:1-27 is not listed on IDEAS

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