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Tuesday, April 3, 2012

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

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


Jacopo Ponticelli


Universitat Pompeu Fabra - Economics Department

Hans-Joachim Voth


Universitat Pompeu Fabra - Centre de Recerca en Economia Internacional (CREI) ; Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; 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 Classifications: H40, H50, H60, N14
Working Paper Series

Date posted: August 01, 2011 ; Last revised: December 06, 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

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Contact Information

Jacopo Ponticelli
Universitat Pompeu Fabra - Economics Department ( email )
Ramon Trias Fargas 25-27
Barcelona 08005
Spain
+34 93 542 2696 (Phone)

Hans-Joachim Voth (Contact Author)
Universitat Pompeu Fabra - Centre de Recerca en Economia Internacional (CREI) ( email )
Ramon Trias Fargas 25-27
Barcelona 08005
Spain
0034-93-542-2637 (Phone)
HOME PAGE: http://www.econ.upf.edu/~voth

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona 08005
Spain
+34 93 542 2637 (Phone)
+34 93 542 1746 (Fax)
HOME PAGE: http://www.econ.upf.edu/~voth

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London EC1V 3PZ
United Kingdom

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