Abstract

http://ssrn.com/abstract=1899287
 
 

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Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008


Jacopo Ponticelli


University of Chicago - Booth School of Business

Hans-Joachim Voth


University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

December 2011


Abstract:     
Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. The results show a clear correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the case. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest after austerity measures. Growing media penetration does not strengthen the effect of cut-backs on the level of unrest.

Number of Pages in PDF File: 41

Keywords: demonstrations, Europe, government deficits, instability, public expenditure, riots, unrest

JEL Classification: H40, H50, H60, N14

working papers series


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Date posted: August 1, 2011 ; Last revised: December 6, 2011

Suggested Citation

Ponticelli, Jacopo and Voth, Hans-Joachim, Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008 (December 2011). Available at SSRN: http://ssrn.com/abstract=1899287 or http://dx.doi.org/10.2139/ssrn.1899287

Contact Information

Jacopo Ponticelli
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
Hans-Joachim Voth (Contact Author)
University of Zurich - UBS International Center of Economics in Society ( email )
Raemistrasse 71
Zuerich, 8006
Switzerland
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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