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IR18-017_Albalate+Bel.pdf (1.36 MB)

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Working paper

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2018

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cc-by-nc-nd, (c) Albalate et al., 2018
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/125086

Do government formation deadlocks damage economic growth? Evidence from history's longest period of political deadlock [WP]

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Abstract

Several countries have experienced lengthy periods of political deadlock in recent years, as they have sought to form a new government. This study examines whether government formation deadlocks damagea country’s economy. To do so, we analyze the case of Belgium, which took a record 541 days to create a post-election government, following the June 2010 federal elections. Employing the synthetic control method, our results show that the Belgian economy did not suffer an economic toll; on the contrary, GDP per capita growth was higher than would have otherwise been expected. As such, our evidence contradicts frequent claims that long periods of government formation deadlock negatively affect an economy.

Subject

Govern parlamentari, Teoria econòmica, Política

Subject (English)

Cabinet system, Economic theory, Practical politics

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Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA))

Citation

ALBALATE, Daniel and BEL I QUERALT, Germà. Do government formation deadlocks damage economic growth? Evidence from history's longest period of political deadlock [WP]. IREA – Working Papers. 2018. Vol.  IR18/17. [consulted: 7 of August of 2026]. Available at: https://hdl.handle.net/2445/125086

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