Social Fractionalization, Political Instability, and the Size of Government

Author/Editor:

Anthony M Annett

Publication Date:

April 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper explores the relationship between the degree of division or fractionalization of a country’s population (along ethnolinguistic and religious dimensions) and both political instability and government consumption, using a neoclassical growth model. The principal idea is that greater fractionalization, proxying for the degree of conflict in society, leads to political instability, which in turn leads to higher government consumption aimed at placating the opposition. There is also a feedback mechanism whereby the higher consumption leads to less instability as government consumption reduces the risk of losing office. Empirical evidence based on panel estimation supports this hypothesis.

Series:

Working Paper No. 2000/082

Subject:

Consumption Defense spending Expenditure Government consumption Income International trade National accounts Terms of trade

English

Publication Date:

April 1, 2000

ISBN/ISSN:

9781451850437/1018-5941

Stock No:

WPIEA0822000

Pages:

30

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