Sounding the alarm: Impact of political instability on growth and fiscal health of the Indian economy |
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Authors: | Mala Lalvani |
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Institution: | (1) Department of Economics, University of Mumbai, Vidyanagari, Mumbai 400 098, India (e-mail: mlalvani@hotmail.com) , IN |
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Abstract: | A noticeable change evident in the Indian political scenario since the eighties has been a sharp rise in the frequency with
which governments have been ousted out of power. This augurs well for Indian democracy as it reflects a ‘political awakening’.
Such changes in government, after an election reflect ‘orderly’: transfer of power and are inherent to the democratic form
of governance. However, a close scrutiny of the political scenario at the state government level shows that there have been
very frequent changes in government between elections. A high frequency of changes in government could be expected to result in frequent reversals or modifications in
policy decisions and have a destabilizing effect on the economy. The present study is an empirical exercise undertaken at
the level of state governments. It makes a first attempt to examine the impact of political instability on growth and on the
fiscal health of the Indian economy.
Received: September 25, 2000/Accepted: January 11, 2002
RID="*"
ID="*" Sincere thanks to Professors Ajit Karnik and Abhay Pethe for their comments and suggestions. I would also like to thank
the two anonymous referees for their insightful comments and suggestions, which have been of great help. The usual disclaimer
applies. |
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Keywords: | : Political instability government growth fiscal policy |
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