For a better browsing experience, please upgrade your browser.

FiveThirtyEight

On Thursday, Thailand’s army chief, Gen. Prayuth Chan-ocha, announced on national television that the military was seizing power from the government. The coup came two days after martial law was enacted, capping months of political deadlock and street protests that have killed 28 people and injured hundreds more. (Thailand also experienced a military-backed coup in 2006, and another in 1991, and several before that.) The military is curtailing civil liberties — for example, instituting a 10 p.m.-to-5 a.m. curfew — but there may also be economic consequences, such as slow tourism and hesitancy from foreign investors.

Economic aftershocks after a coup are difficult to analyze and conditional on how violent and tumultuous the period becomes. In most cases, coups slow growth, according to a 1996 study, “Political Instability and Economic Growth.” But after Thailand’s 2006 coup, economic growth held steady and tourism slowed only slightly.

A statistical analysis and probabilistic simulation by political scientist and consultant Jay Ulfelder, at his blog Dart-Throwing Chimp, shows that economic growth slows, on average, by 2.1 percentage points in the year of a coup, 1.3 points in the year after and 0.2 points in the year after that.

flowers-datalab-thaicoup-1

But, as Ulfelder has outlined, poor economic conditions could be a coup’s main cause as much a consequence of it. Even before the most recent coup in Thailand, the country’s real gross domestic product growth slowed; political instability over the past few months was the primary reason. To work through these thorny causal issues and best isolate a coup’s effect, Ulfelder employed a statistical technique that matched countries with similar risks of coups. (Ulfelder’s code for running these simulations is available on GitHub. Try it out.)

There’s also research by Paul Collier, a professor of economics at Oxford University, organized in his 2009 book, “Wars, Guns, and Votes: Democracy in Dangerous Places.” Collier looked at income instead of GDP and found that the shock of a coup reduces income by about 3.5 percent in the year of the coup and by a cumulative total of 7 percent. Collier’s work — in several research papers (here and here) — also studies why coups happen. He found that slow economic growth and low income levels can be used to predict coups, but that in addition to those poor conditions, high military spending can forebode regime change.

In Thailand’s case, its economy has been growing slowly, with average annual growth between 2004 and 2012 at less than 4 percent. Thailand’s neighbors Vietnam and Indonesia have grown, on average, 6.4 and 5.7 percent, respectively, over the same period, according to World Bank data. Thailand’s military spending (as a percentage of all government spending) has also been on the rise.

Ulfelder also forecasts countries prone to coups. His 2014 rankings had Thailand marked as the 10th most vulnerable country, with just over a 10 percent probability. In his latest blog entry, he said he was a “bit surprised by this turn of events, but not shocked.”

Add Comment

Filed under , , , ,

Powered by WordPress.com VIP