Social Fractionalization, Political Instability, and the Size of Government

31 Pages Posted: 30 Jan 2006

See all articles by Anthony Annett

Anthony Annett

International Monetary Fund (IMF)

Date Written: April 2000

Abstract

This paper explores the relationship between the degree of division or fractionalization of a country's population (along ethnoliguistic 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.

Keywords: fractionalization, political economy, size of government

JEL Classification: E62, O23

Suggested Citation

Annett, Anthony, Social Fractionalization, Political Instability, and the Size of Government (April 2000). IMF Working Paper No. 00/82, Available at SSRN: https://ssrn.com/abstract=879607

Anthony Annett (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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