Estimating the effects of political instability in nascent democracies

Thomas Emery (Author), Mitja Kovač (Author), Rok Spruk (Author)

Abstract

In this paper, we revisit and examine the effect of political instability on institutional quality. To this end, we exploit the crackdown of government cabinet in 2008 that led to almost two decades of pervasive political instability using the unique case of Slovenia and estimate the average treatment effect of political instability and the missing counterfactual scenario for the period 1996–2020. Based on large-scale Bayesian analysis with Metropolis–Hastings algorithm, we extract the residual component of institutional quality from the variation in predetermined unobserved characteristics. Across more than 1.5 million sequenced random samples, we construct novel time-varying estimates of institutional quality at the local and regional level. Our difference-in-differences and synthetic control estimates emphasize a rampant deterioration of institutional quality in response to political instability with evidence of weakened rule of law, less effective public sector, decreased political accountability, and more widespread prevalence of power abuses. The estimated negative effects of political instability are robust to a variety of placebo checks across more than 12 billion placebo averages for institutional quality outcome variable using random sampling method of treatment permutation.

Keywords

družbenopolitična ureditev;institucije;krize;socio-political system;institutions;crises;

Data

Language:	English
Year of publishing:	2023
Typology:	1.01 - Original Scientific Article
Organization:	UL EF - Faculty of Economics
UDC:	304
COBISS:	163425795
ISSN:	0021-4027
Views:	794
Downloads:	233
Average score:	0 (0 votes)
Metadata:

Other data

Secondary language:	Slovenian
Secondary keywords:	družbenopolitična ureditev;institucije;krize;
Type (COBISS):	Article
Pages:	str. 599-642
Volume:	ǂVol. ǂ243
Issue:	ǂiss. ǂ6
Chronology:	2023
DOI:	10.1515/jbnst-2022-0074
ID:	22824663