The Political Performance of Governments, External Debt Service, and Domestic Political Violence

Abstract

This paper identifies some of the political mechanisms that help to explain why the relationship between IMF-supported stabilization programs and other economic adjustments related to the problems of external debt service and political violence are, at best, indirect. A cross-sectional pooled time series (35 Third World countries, 1974-86) is used to test the proposition that low political capacity indirectly increases frequency of protest demonstrations, political strikes and riots when governments attempt to adjust to rising debt service costs without disturbing the political status quo. The data analysis supports the proposition. The burden of external debt service does not directly affect these forms of political violence. Prior IMF-supported stabilization programs have a coincidental impact on increasing domestic political strife to the extent that weak governments use IMF conditionality to justify introducing austerity measures they would have to implement with or without IMF assistance.