The Economics Of Coups

August 2, 2016 in Daily Bulletin

Earlier in July, rogue elements of the Turkish military attempted a Coup d’état in Turkey. The Economist used the opportunity to take a look at the history of coups:

  • Between 1950 and 2010 there were about 460 coup attempts in the world, and they were successful 49.7% of the time.
  • Since 2003 though, coups have a 70% success rate.
  • This seems to be in part because best practices on coups have spread. Anybody looking to overthrow the government can, literally, purchase a book called “Coup d’État: A Practical Handbook“.
  • That book points to why the Turkish coup failed. While they followed key points of advice such as taking over media outlets and controlling traffic, they ignored others such as launching it late at night, when most people are asleep, and taking key leaders into custody.
  • But technological change might also have made coups more difficult. While the Turkish military did try to take control of the media, Turkey’s President was still able to get a message out to the people asking them to mass on the streets, with the assistance of social media.
  • Coups have become rarer over time. This seems to largely be because people are getting richer. Doubling income per person causes the probability of coups to fall by 27%.
  • Growth rates also matter. Every extra percentage point of growth, reduces the probability of a coup by 4.4%. Growth in Turkey had, notably, stalled in the years preceding the coup attempt.
  • In democracies coups are harmful to a country’s economy. They cause income per person to fall by over 10% in the decade after a coup.
  • In a non-democracy however there is no long-term impact to the country’s growth. Possibly because coups are the only real way for governments to change.
  • After a successful coup there is usually a reduction in social spending. This might be because the new rulers are looking to reward themselves for the risk that they took by re-directing funds to their personal accounts.
  • A lack of political legitimacy may also make it harder for coup leaders to collect taxes.

Read more about what all of this means for the future of Turkey’s economy, and other details about coups past and present over here.

Source: The Economist