Polarisation, Populism and Hyperinflation[s]: Some Evidence from Latin America

Manoel Bittencourt

No 200921, Working Papers from University of Pretoria, Department of Economics

Abstract: We test for the populist view of state capture in Latin America be- tween 1970 and 2003. The empirical results-based on the relatively novel panel time-series data and analysis - confirm the prediction that recently-elected governments coming into power after periods of po- litical dictatorship, and which are faced with high economic inequal- ity and demand for redistribution, end up pursuing unfunded populist [re] distributive policies. These policies, in turn, lead to bursts of hyper- in?ation and therefore macroeconomic instability in the region. All in all, we suggest that the implementation of democracy as such requires not only the 'right political context'- or a constrained executive-to work well, but it also must come with certain economic institutions, (e.g. central bank independence and a credible and responsible fiscal authority), institutions which would raise the costs of pursuing populist policies in the first place.

Keywords: Polarisation; populism; hyperinflation; Latin America (search for similar items in EconPapers)
JEL-codes: E31 E65 N16 O23 O54 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2009-09
New Economics Papers: this item is included in nep-dev, nep-lam and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.up.ac.za/media/shared/61/WP/wp_2009_21.zp39399.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:200921

Access Statistics for this paper

More papers in Working Papers from University of Pretoria, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Rangan Gupta ().