Do coups create economic crises? Evidence from Latin America and the Caribbean

Abstract

While most of the literature considers economic crisis as a precursor to coup attempts, theoretical considerations suggest that coups may also cause crises. Estimating effects of different types of coups on crisis risk across 32 countries in Latin America and the Caribbean between 1920 and 2022, the findings indicate that civilian-led coups and coups dismantling democracy significantly and substantially increase the likelihood of entering an economic crisis. As such, certain types of coups have severe economic consequences.