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The Political Economy of Development: Empirical Evidence from Fiji

Author

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  • Gounder, Rukmani

    (Massey University)

Abstract

This paper presents an empirical analysis of the impact of political instability on Fiji's economic growth. Fiji experienced two military coups after the 1987 election of the Labour and National Federation Party coalition government. Following the common practice, a "neoclassical" growth model is used to estimate the effect of military coups on Fijis economic growth. The empirical results reveal that short-run and long-run relationship between political instability and economic growth adversely affected the economy. Fiji experienced a decline in exports and in public and private investment, and an outflow of skilled labour in the post coup period. The lack of these factors led to sluggish growth. The direct effect on the marginal productivities of labour, capital and exports indicate that decreases in the marginal productivity are primarily due to capital and labour. The indirect effects of political instability on each of the factors of production reveal that adverse effects of the coups have reduced the availability of factors of production.

Suggested Citation

  • Gounder, Rukmani, 1999. "The Political Economy of Development: Empirical Evidence from Fiji," Economic Analysis and Policy, Elsevier, vol. 29(2), pages 133-150.
    • Handle: RePEc:eee:ecanpo:v:29:y:1999:i:2:p:133-150
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    Cited by:

    1. Gounder, Rukmani, 2005. "Dimensions Of Conflict And The Role Of Foreign Aid In Fiji," Discussion Papers 23699, Massey University, Department of Applied and International Economics.
    2. Gounder, Rukmani, 2003. "Effectiveness of Globalization: A Case Study of Fiji," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 5, pages 1-23.

    More about this item

    Keywords

    Coalitions; Development; Election; Government; Growth; Political;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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