Are Economic Crises and Government Changes Related? A Descriptive Statistic Analysis
The main purpose of this study is to provide a detailed
statistical overview of the time and regional distribution, relative
timing occurrence of economic crises and government changes in 51
economies over the 1990–2007 periods. At the same time, the
predictive power of the economic crises on set government changes
will be examined using “signal approach".
The result showed that the percentage of government changes is
highest in transition economies (86 percent of observations) and
lowest in Latin American economies (39 percent of observations).
The percentages of government changes are same in both developed
and developing countries (43 percent of observations). However,
average crises per year (frequency of crises) are higher (lower) in
developing (developed) countries than developed (developing)
countries. Also, the predictive power of economic crises about the
onset of a government change is highest in Transition economies (81
percent) and lowest in Latin American countries (30 percent). The
predictive power of economic crises in developing countries (43
percent) is lower than developed countries (55 percent).