On the Economic Consequences of Political Turnover: Evidence from Mozambican Firms

Felipe Starosta de Waldemar attended the Nordic Conference in Development Economics 2016, hosted by the University of Oslo, on June 13 and 14th 2016. He presented his paper “On the Economic Consequences of Political Turnover: Evidence from Mozambican Firms”, written in collaboration with Patrick Domingues.
Abstract:
This paper investigates the impact of regional political turnover on firm performance. We combine an original Mozambican database on election results with a national geo-localized firm survey and we perform a difference-in-difference analysis. Our empirical strategy relies on the comparison between treated provinces (those where the wining party changed between two different elections) and control provinces (where the winning party remained the same). Results show that firms facing political turnover performed significantly less after the electoral shock. This find suggests that in a context of weak political and economic environments, political instability is a binding constraint for economic growth.