Does economic growth really reduce domestic conflict? An empirical evidence from Latin America

Abstract

The purpose of this paper is to empirically challenge the widespread belief that economic growth reduces social instability by analysing an unbalanced panel data from 25 Latin American and Caribbean countries during their transitional periods. We find that economic growth during these periods does not necessarily lead to social stability and may increase the domestic conflict’s likelihood. Furthermore, the development of channels for spreading new ideas appears to amplify the impact of economic growth on domestic conflict. The study concludes that economic growth is not a panacea for social stability, especially in contexts where the development of idea spreading channels has increased societal expectations.