International Commodity Prices and Political Unrest in Latin America

New paper by Maldonado: Latin America is a region characterized by a turbulent political history and a marked dependence on commodity exports. Constructing a new panel dataset covering most of the 20th century, I examine how international prices for Latin America’s principal exports influenced political unrest. I document a significant association between prices and subsequent political unrest. The results suggest that political dissidents behave rationally, choosing from a menu of protest activities. Specifically, higher export prices are associated with a lower likelihood of violent protest and a higher probability of peaceful demonstration, consistent with higher opportunity cost discouraging dissidents from undertaking riskier protest activities. This pattern is especially true for the price of commodities which produce diffuse rents which are less easily extracted by the state.