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Corruption and Political Stability: Does the Youth Bulge Matter?

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  • Mohammad Reza Farzanegan
  • Stefan Witthuhn
Abstract
This study shows that the relative size of the youth bulge matters for how corruption affects the internal stability of a political system. We argue that corruption cannot buy political stability (e.g., the greasing hypothesis) in countries with a relatively large youth population. Using panel data covering the 2002-2012 period for more than 100 countries, we find a negative interaction effect between the relative size of the youth population and corruption on internal political stability. Corruption is a destabilizing factor for political systems when the share of the youth population in the adult population exceeds a threshold level of approximately 19%. The negative interaction term is robust, controlling for country and year fixed effects, a set of control variables that may affect internal political stability, an alternative operationalization of youth bulge, and a dynamic panel estimation method.

Suggested Citation

  • Mohammad Reza Farzanegan & Stefan Witthuhn, 2016. "Corruption and Political Stability: Does the Youth Bulge Matter?," CESifo Working Paper Series 5890, CESifo.
  • Handle: RePEc:ces:ceswps:_5890
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    More about this item

    Keywords

    demographic transition; youth bulge; political stability; corruption;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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