A Time to Plot, a Time to Reap: Coups, Regime Changes and Inequality

A vast economic literature examines the welfare gains and distributional consequences of economic reforms, while much less is generally known on the relationship of inequality and forced regime changes. Some studies analyze how economic inequality impacts the likelihood of coups, but the distributional outcomes of such events have been largely ignored to date. This study helps to fill that gap by examining the effect of coups on the distribution of consumption and income within countries. Employing novel data, we find that successful coups have a significant positive impact on the consumption shares of the lowest quintile, and a strong negative impact on the highest quintile. In turn, no significant redistribution is caused by failed coups. The redistributive effect is stronger for civil coups, as compared to military coups. Despite their negative impact on overall growth and per capita income, our results show that forced regime changes reduce inequality at a short notice, partially explaining their continued popularity in highly unequal developing countries.