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Political Fragility: The Economic Impact of Coups d’Etat
This study uses an entropy balancing model to show that coups d’etat can reduce GDP growth by around 2.3 percentage points in the same year. This is a larger effect than some previous estimates, and is found to be persistent over time, reducing cumulative GDP growth by around five percentage points over the following five years. This study goes deeper than previous research into the drivers of that impact, finding that economic sanctions are an an important reason for the observed lower growth in many cases and that the principal channel is via private consumption and investment.
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