| Summary: | Traditional studies of the modernization-instability thesis have neglected the simultaneous influence of time and place on the relationship between modernization (social mobilization and political participation) and political instability, and the possible causal linkage between the two concepts. Empirical support for modernization-instability hypothesis will be obtained if and only if there is a strong positive correlation between modernization and political instability and the former causes the latter unidirectionally. Only then can one assert that modernization is exogenous, and that a policy geared toward restricting modernization is a proper anti-instability policy.
This work attempts to address the question of correlation and causality through a pooled time-series cross-sectional data design and the use of Granger-causality tests. Particular attention is paid to the error structure of the models.
Using pooled regression, a model of political instability is estimated for a total of 35 countries for the period 1960-1982. Granger tests are performed on twelve separate countries randomly selected from the 35.
The results indicate that there is the expected positive relationship between modernization and political instability. Further, political institutionalization and economic well-being have strong negative influence on political instability. With regard to causality, the results vary by country. Some countries experience no causality between modernization and political instability, while some witness bidirectional causality. Further, some nations experience unidirectional causality running from modernization to political instability, while some depict a reverse causation.
The main results suggest that modernization and political instability are positively related, and that political instability can have causal influence on modernization, just as modernization can exert causal influence on political instability.
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