Political Instability and Economic Growth: Implications of Coup Events in Sub‐Saharan Africa

Abstract

The study examines the differential roles of various elite political instability (PI) events—successful coups d'etat, abortive coups, or coup plots—in the growth of Sub‐Saharan Africa. It analyzes World Bank economic statistics and data on the incidence of coups d'etat for 31 countries in a cross‐country augmented production function framework that incorporates PI events as well as labor and capital as arguments. It finds that abortive coups, rather than successful coups, had the greatest adverse impact on economic growth over the 1960–1986 period. Coup plots were also observed to be growth‐inhibiting. This deleterious “direct” effect of PI is observed to be channeled via the deterioration in the marginal productivity of capital, regardless of coup event. While abortive coups negatively influenced economic growth monotonically, however, the impacts of successful coups and coup plots appeared to be non‐monotonic: negative generally but positive at very low levels of investment.