Economic instability leads to political unrest – Greece study proves

In 2009, the Greek economy crashed, sending the country into a severe recession. The financial failure also churned up political unrest: the government was forced to call for an early election and lost power. The economic crisis that rattled Greece was not isolated—it affected several countries in the European Union. Norway, for example, also experienced a dip in its gross domestic product. Yet there was little political turmoil in the country. Why the difference? “There was a lot of news about people being angry with the Greek government and feeling lied to by their politicians,” says Nancy Qian, professor of managerial economics and decision sciences at the Kellogg School. “It was striking that in other European countries going through a recession, we weren’t hearing about political unrest or riots.” Throughout history, economic crises have sparked differing political responses. But it can be difficult to pinpoint the underlying reason for any differences because countries like, for instance, Greece and Norway differ in many ways, including their overall levels of prosperity. So Qian and coauthors decided to focus on one specific metric: how much the people of a country typically trust other people. “It’s about how likely I am to attribute the economic problems to circumstance or luck versus to the political leadership.” They found that in countries where general trust levels are high, an economic crisis is less likely to trigger political unrest. But in countries where people feel less trusting of others, signs of a flailing economy are more likely to lead to the ruling party being voted out of power. “If I’m a less trusting person, I might say something like, ‘I don’t understand the details of what our leader is doing, but most politicians are bad and they’re lazy, so it is probably his fault,’” Qian explains. Alternately, a trusting person might blame factors beyond politicians’ control. “It’s about how likely I am to attribute the economic problems to circumstance or luck versus to the political leadership.”