Hostname: page-component-cb9f654ff-hn9fh Total loading time: 0 Render date: 2025-08-07T20:52:29.389Z Has data issue: false hasContentIssue false
  • English
  • Français

Political instability, institutional change and economic growth in Brazil since 1870

Published online by Cambridge University Press:  01 June 2020

Nauro Campos ,
Menelaos Karanasos ,
Panagiotis Koutroumpis  and
Zihui Zhang
Nauro Campos
Affiliation:
University College London, London, UK ETH Zurich, Zurich, Switzerland IZA-Bonn, Bonn, Germany
Menelaos Karanasos*
Affiliation:
Brunel University London, London, UK
Panagiotis Koutroumpis
Affiliation:
Queen Mary University London, London, UK
Zihui Zhang
Affiliation:
Brunel University London, London, UK
*
*Corresponding author. Email: menelaos.karanasos@brunel.ac.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

Are institutions a deep cause of economic growth? This paper tries to answer this question in a novel manner by focusing on within-country variation, over long periods of time, using a new hand-collected data set on institutions and the power-ARCH econometric framework. Focusing on the case of Brazil since 1870, our results suggest (a) that both changes in formal political institutions and informal political instability affect economic growth negatively, (b) there are important differences in terms of their short- versus long-run behaviour, and (c) not all but just a few selected institutions affect economic growth in the long-run.

Keywords

Economic growthinstitutionspolitical instabilitypower-ARCHvolatility

JEL classification

C14: Semiparametric and Nonparametric Methods: General E23: Production O40: General D72: Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior

Information

Type
Research Article
Information
Journal of Institutional Economics , Volume 16 , Issue 6 , December 2020 , pp. 883 - 910
Copyright
Copyright © Millennium Economics Ltd 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Acemoglu, D., García-Jimeno, C. and Robinson, J. A. (2015), ‘State Capacity and Economic Development: A Network Approach’, American Economic Review, 105(8): 2364–2409.Google Scholar
Acemoglu, D., Johnson, S. and Robinson, J. A. (2002), ‘Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution’, The Quarterly Journal of Economics, 117(4): 1231–1294.CrossRefGoogle Scholar
Acemoglu, D., Naidu, S., Restrepo, P. and Robinson, J. A. (2019), ‘Democracy Does Cause Growth’, Journal of Political Economy, 127(1): 47–100.CrossRefGoogle Scholar
Asteriou, D. and Price, S. (2001), ‘Political Instability and Economic Growth: UK Time Series Evidence’, Scottish Journal of Political Economy, 48(4): 383–399.CrossRefGoogle Scholar
Bai, J. and Perron, P. (2003), ‘Computation and Analysis of Multiple Structural Change Models.’ Journal of Applied Econometrics, 18(1): 1–22.CrossRefGoogle Scholar
Barro, R. J. (1991), ‘Economic Growth in a Cross-section of Countries’. The Quarterly Journal of Economics, 106(2): 407–443.CrossRefGoogle Scholar
Benhabib, J. and Spiegel, M. (1997), ‘Growth and Investment Across Countries: Are Primitives All that Matter’. New York University and Federal Reserve Bank of San Francisco, Mimeo.Google Scholar
Bethell, L. (1989), Brazil: Empire and Republic 1822–1930, Volume 3 of The Cambridge History of Latin America. Cambridge, New York and Oakleigh: Cambridge University Press.CrossRefGoogle Scholar
Bethell, L. (2008), Politics in Brazil Under Vargas, 1930–1945 (1st edn), Volume 9 of The Cambridge History of Latin America, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Black, F. (1987), Business Cycles and Equilibrium, Hoboken, New Jersey: John Wiley and Sons, Inc.Google Scholar
Boix, C., Miller, M. and Rosato, S. (2013), ‘A Complete Data Set of Political Regimes, 1800–2007’, Comparative Political Studies, 46(12): 1523–1554.Google Scholar
Bollerslev, T. and Wooldridge, J. M. (1992), ‘Quasi-maximum Likelihood Estimation and Inference in Dynamic Models with Time-Varying Covariances’, Econometric Reviews, 11(2): 143–172.CrossRefGoogle Scholar
Bolt, J., Inklaar, R., de Jong, H. and van Zanden, J. L. (2018), ‘Rebasing “Maddison”: New Income Comparisons and the Shape of Long-Run Economic Development’, GGDC Research Memorandum, 174: 1–67.Google Scholar
Bolt, J. and Van Zanden, J. L. (2014), ‘The Maddison Project: Collaborative Research on Historical National Accounts’, The Economic History Review, 67(3): 627–651.Google Scholar
Campante, F. (2009), Brazil×Argentina: Political Instability and Economic Performance as Seen from the Brasilia and Buenos Aires. Retrieved from: http://bibliotecadigital.fgv.br/ocs/index.php/sceesp/ce/paper/viewFile/1213/399.Google Scholar
Campos, N. and Gassebner, M. (2013), ‘Domestic Political Instability, International Terrorism and the Escalation Effect’, Economics & Politics, 25(1): 27–47.CrossRefGoogle Scholar
Campos, N. and Karanasos, M. (2008), ‘Growth, Volatility and Political Instability: Non-Linear Time-Series Evidence for Argentina, 1896–2000’, Economics Letters, 100(1): 135–137.CrossRefGoogle Scholar
Campos, N., Karanasos, M. G. and Tan, B. (2012), ‘Two to Tangle: Financial Development, Political Instability and Economic Growth in Argentina’, Journal of Banking and Finance, 36(1): 290–304.CrossRefGoogle Scholar
Campos, N. and Nugent, G. (2002), ‘Who is Afraid of Political Instability?’, Journal of Development Economics, 67(1): 157–172.CrossRefGoogle Scholar
Carmignani, F. (2003), ‘Political Instability, Uncertainty and Economics’. Journal of Economic Surveys, 17(1): 1–54.CrossRefGoogle Scholar
Carneiro, D. (1960), Historia do Periodo Provincial do Parana: Galeria de Presidentes, 1853–1889, Curitiba: Tipografia Max Roesner Press.Google Scholar
Colson, R. F. (1981), ‘On Expectations-Perspectives on the Crisis of 1889 in Brazil’, Journal of Latin American Studies, 3(2): 265–292.CrossRefGoogle Scholar
De Gregorio, J. (1992), ‘Economic Growth in Latin America’, Journal of Development Economics, 39(1): 59–84.CrossRefGoogle Scholar
Ding, Z., Granger, C. W. and Engle, R. F. (1993), ‘A Long Memory Property of Stock Market Returns and a New Model’, Journal of Empirical Finance, 1(1): 83–106.CrossRefGoogle Scholar
Driscoll, J. C. and Kraay, A. C. (1998), ‘Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data’, Review of Economics and Statistics, 80(4): 549–560.CrossRefGoogle Scholar
Easterly, W. and Rebelo, S (1993), ‘Fiscal Policy and Economic Growth’, Journal of Monetary Economics, 32(3): 417–458.Google Scholar
Everett, C. (2011). ‘Organized Labor in Brazil 1900–1937: From Anarchist Origins to Government Control’. Available at: http://libcom.org/history/organized-labor-brazil-1900-1937-anarchist-origins-government-control-colin-everett.Google Scholar
Fausto, B. (1986), Brazil: The Social and Political Structure of the First Republic. 1889–1930, Volume 5 of The Cambridge History of Latin America, Cambridge: Cambridge University Press, pp. 779–830.Google Scholar
Fosu, A. K. (1992), ‘Political Instability and Economic Growth: Evidence from Sub-Saharan Africa’, Development and Cultural Change, 40(4): 829–841.CrossRefGoogle Scholar
Fountas, S. and Karanasos, M. (2007), ‘Inflation, Output Growth, and Nominal and Real Uncertainty: Empirical Evidence for the G7’, Journal of International Money and Finance, 26(2): 229–250.CrossRefGoogle Scholar
Gillman, M. and Kejak, M. (2005), ‘Contrasting Models of the Effect of Inflation on Growth’, Journal of Economic Surveys, 19(1): 113–136.CrossRefGoogle Scholar
Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (2004), ‘Do Institutions Cause Growth?’, Journal of Economic Growth, 9(3): 271–303.CrossRefGoogle Scholar
Grier, K. and Tullock, G. (1989), ‘An Empirical Analysis of Cross-National Economic Growth, 1951–1980’, Journal of Monetary Economics, 24(2): 48–69.Google Scholar
Gurr, T. R. (1996), Polity II: Political Structures and Regime Change, 1800–1986, Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2006-01-18. https://doi.org/10.3886/ICPSR09263.v1.Google Scholar
Gyimah-Brempong, K. and De Camacho, S. M. (1998), ‘Political Instability, Human Capital, and Economic Growth in Latin America’, The Journal of Developing Areas, 32(4): 449–466Google Scholar
Hahner, J. E. (1969), Civilian-Military Relations in Brazil 1889–1898, Columbia, SC: University of South Carolina Press.Google Scholar
Hall, M. M. and Spalding, H. A. (1986), The Urban Working Class and Early Latin American Labour Movements, 1880–1930, Volume 4 of The Cambridge History of Latin America, Cambridge: Cambridge University Press, pp. 367–442.CrossRefGoogle Scholar
He, C. and Teräsvirta, T. (1999), ‘Statistical Properties of the Asymmetric Power ARCH Model’, in Engle, R. F., White, H. (eds.), Cointegration, Causality and Forecasting, Festschrift in Honour of Clive W. J. Granger. Oxford: Oxford University Press, pp. 462–474.Google Scholar
Higgins, M. L. and Bera, A. K. (1992), ‘A Class of Nonlinear ARCH Models’, International Economic Review, 33(1): 137–158.Google Scholar
Hudson, R. A. (1998), Brazil: A Country Study. Washington, DC: Federal Research Division. In Library of Congress, pp. 658.Google Scholar
Jong-A-Pin, R. (2009), ‘On the Measurement of Political Instability and its Impact on Economic Growth’, European Journal of Political Economy, 25(1): 15–29.Google Scholar
Karanasos, M. and Kim, J. (2006), ‘A Re-Examination of the Asymmetric Power ARCH Model’, Journal of Empirical Finance, 13(1): 113–128.CrossRefGoogle Scholar
Karanasos, M. and Schurer, S. (2005), ‘Is the Reduction in Output Growth Related to the Increase in its Uncertainty? The Case of Italy’, WSEAS Transactions on Business and Economics 3(2): 116–122.Google Scholar
Karanasos, M. and Schurer, S. (2008), ‘Is the Relationship Between Inflation and its Uncertainty Linear?’, German Economic Review, 9(3): 265–286.CrossRefGoogle Scholar
Knack, S. and Keefer, P. (1995), ‘Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures’, Economics and Politics, 7(3): 207–227.CrossRefGoogle Scholar
Kovač, M. and Spruk, R. (2016), ‘Institutional Development, Transaction Costs and Economic Growth: Evidence from a Cross-Country Investigation’, Journal of Institutional Economics, 12(1): 129–159.CrossRefGoogle Scholar
Levine, R. and Renelt, D. (1992), ‘A Sensitivity and Analysis of Cross-Country Growth Regressions’, American Economic Review, 82(4): 942–963.Google Scholar
Lima, O. (1986), O Imperio Brasileiro, Brasilia: Editora Universidade de Brasilia Press.Google Scholar
Lindberg, S. I., Coppedge, M., Gerring, J. and Teorell, J. (2014), ‘V-Dem: A New Way to Measure Democracy’, Journal of Democracy, 25(3): 159–169.CrossRefGoogle Scholar
Love, J. L. (1980), Sao Paulo in the Brazilian Federation, 1889–1937, Stanford: Stanford University Press.Google Scholar
Macedo, M. K. (1998), Revoltas Populares na Provincia do Rio Grande: o ‘Quebra-Quilos’ e o ‘Motim das Mulheres’. Historia do RN.Google Scholar
MacLachlan, C. M. (2003), A History of Modern Brazil: The Past Against the Future, Wilmington, DE: Rowman and Littlefield.Google Scholar
Maddison, A. (1995), Historical Statistics for the World Economy: 1–2003 AD.Google Scholar
Marshall, M. G., Gurr, T. R. and Jaggers, K. (2015), ‘Executive Constraints (XCONST)’. Accessed at: http://hdl.handle.net/10622/UEALPE, IISH Dataverse, V1.Google Scholar
McCleary, R. M. and Barro, R. J. (2006), ‘Religion and Economy’, Journal of Economic Perspectives, 20(2): 49–72.CrossRefGoogle Scholar
Miguel, E., Satyanath, S. and Sergenti, E. (2004), ‘Economic Shocks and Civil Conflict: An Instrumental Variables Approach’, Journal of Political Economy, 112(4): 725–753.CrossRefGoogle Scholar
Mitchell, B. R. (2003), International Historical Statistics: The Americas, 1750–2000, London: Palgrave MacMillan.Google Scholar
Murdoch, J. C. and Sandler, T. (2004), ‘Civil Wars and Economic Growth: Spatial Dispersion’, American Journal of Political Science, 48(1): 138–151.CrossRefGoogle Scholar
Ramey, G. and Ramey, V (1995), ‘Cross-Country Evidence on the Link between Volatility and Growth’, American Economic Review, 85(5): 1138–1151.Google Scholar
Rodrik, D., Subramanian, A. and Trebbi, F. (2004), ‘Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development’, Journal of Economic Growth, 9(2): 131–165.CrossRefGoogle Scholar
Roett, R. (1999), Brazil: Politics in a Patrimonial Society, Westport, CT: Praeger.Google Scholar
Sala-i-Martin, X. X. (1997), ‘I Just Ran Four Million Regressions’. NBER Working Paper No. 6252.Google Scholar
Schneider, A. (2009), The 1910 Sailors' Revolt Against the Lash: The Military, Politics, the Body, and Rights in Brazil. Pozin Center Ignacio Martín-Baró Human Rights Essay Competition, Chicago: University of Chicago Press.Google Scholar
Skidmore, T. E. (2009), Brazil: Five Centuries of Change (2nd edn edn), New York: Oxford University Press.Google Scholar
Spruk, R. (2016a), ‘Institutional Transformation and the Origins of World Income Distribution’, Journal of Comparative Economics, 44(4): 936–960.CrossRefGoogle Scholar
Spruk, R. (2016b), ‘Replication Data for: Institutional Transformation and the Origins of World Income Distribution’, Journal of Comparative Economics, 44(4): 936-960. Harvard Dataverse V1. Accessed at: https://doi.org/10.7910/DVN/YN7DVA.Google Scholar
Torstensson, J. (1994), ‘Property Rights and Economic Growth: An Empirical Study’, Kyklos, 47(2): 231–247.CrossRefGoogle Scholar
Vinhas de Queiroz, M. (1966), Messianismo e Conflito Social: A Guerra Sertaneja do Contestado (1912–1916), Rio de Janeiro: Oxford University Press.Google Scholar
Weingast, B. R. (1997), ‘The Political Foundations of Democracy and the Rule of the Law’. American Political Science Review, 91(2): 245–263.CrossRefGoogle Scholar
Woodard, J. (2009), A Place in Politics: Sao Paulo, Brazil, from Seigneurial Republicanism to Regionalist Revolt, Durham and London: Duke University Press: 254 Note 1.Google Scholar