Do Budget Cuts Cause More Riots?

Photo: william_79

The UK riots continue as PM David Cameron and the Metropolitan police flood London with 16,000 officers in hopes of calming the civil unrest.

Critics have suggested that this is the behavior of a generation that’s been ignored by the establishment. The anarchy on the streets of London has been attributed to high unemployment and disaffected youth, combined with a trigger event — the death of Mark Duggan, shot by police last Saturday.

A couple weeks ago, Jacopo Ponticelli and Hans-Joachim Voth put out their working paper “Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009.” It uses cross-country data in the 90-year period to examine whether riots and civil unrest increase as governments cut spending. They found a positive correlation between social instability and budget cuts. With regard to the recent riots, Voth writes on his blog:

Once you cut expenditure by more than 2% of GDP, instability increases rapidly in all dimensions, and especially in terms of riots and demonstrations.

We also use some additional, more detailed data on the causes of each demonstration to confirm our hypothesis that the link is causal.

So, if you ever found yourself reading papers by Alesina and co-authors arguing that i. budget cuts can be good for growth ii. there is no punishment at the polls for governments cutting expenditure, and wondering why governments don’t engage in more austerity – maybe here is your answer. Even if (and it’s a big if, given the IMF’s latest research) Alesina et al. are right, and growth can follow cuts, the pain may be concentrated amongst some groups. If these become massively unhappy… it can start to look pretty ugly out there in the streets, and I doubt that that’ll be good for growth.

The Guardian’s Datablog has a map of all the spending cuts made to local councils in the UK last year. Thirty-six councils got the maximum cut of 8.9%, with a 4.4% average across the total 350 councils. Former London Mayor Ken Livingstone has already jumped on the “spending cuts = riots” explanation, to much criticism.

(HT: Jonathan Hersh)


Eric M. Jones.

The U.S. labors under the illusion that 3/4 of us are middle class and that the rich somehow do something to make our lives better. In the UK they have no such illusion. 3/4 of them believe they are "working class" and that the rich (and "royalty") are crushing them.

This rioting could drift to the US...and once it starts, lock your doors.

'Religion is what that keeps the poor from eating the rich.'
--(More or less Napolean)

Rosario

Er... actually, a YouGov poll last year found 2/3 of British people identify as middle class.
http://www.telegraph.co.uk/news/politics/7121291/Posh-is-finished-as-two-thirds-identify-as-middle-class.html

Eric M. Jones

80% of Brits are "Working Class" (or lower!), because they make less than 20,000 Pounds/year. These are easy stats to come.

Wiki it.

Rosario

What you said was that '3/4 of them believe they are “working class"', and no, they don't. I actually kind of agree with your general point about attitudes, but pulling "stats" our of your arse is just annoying.

Donnie

Rosario's right the working class in the UK's shrunk over the last 50 years, most people are now middle class. But Eric has a good point in that the UK has less belief than the US in the morality of free markets - ie you are worth what you earn etc. On the other hand, the UK's way behind a lot of other european countries, particularly the Scandinavians.

Merely a silly Brit next to the Americans idiot..

Diego

It's inaccurate to label citizens who protest AGAINST government costs anarchists. Anarchy is an ideology that espouses total absence from government. Therefore, how does it make sense to dub protesters against reducing government anarchists? It is a non sequitor.

Donnie

Diego, they're not protesting against cuts. A few were protesting against police brutality, then it spiraled into looting for its own sake.

Denny

It's questionable how much of the cuts have actually happened yet, rather than simply being planned. The cuts are over many years and tended to be more at the back end of the government's plan, while tax rises were frontloaded and have already happened. I don't believe these rioters will be reading enough to know when and where cuts are going to happen, so unless there's a tangible effect of the cuts on the ground then I doubt the cuts are to blame. I would say it's quite unlikely they're feeling the effects of cuts yet, but it's a good excuse to throw about.

Currymeister

Hello...Good post!

Well, I would think this is something that would happen systematically. Governments create wealth too easily for people to enjoy, a false paradise if you will. And when this incessant and unnecessary amount of government spending becomes noticeably too high and bothersome then the austerity measures proposed will never be taken likely.

A BIG example to use is Greece. Once people are living off too much EXCLUSIVE Government grants then the pampered populace will eventually never want to return to austerity measures or hard work.

Themistocles

My, what ignorance...

I'm a Greek living and working in Greece (scratch that - fired months ago). Everyone who knows something about Greece, something more than the Mirror gives them, knows that the huge majority of the state 'grants' lined the pockets of the very, very few; that the Greeks work longer hours than most (if not all?) of their European colleagues; that they do that for the lowest wages; and with the highest prices.

Definitely NOT a good method to get your facts, the front pages of tabloids.

Riots here are taking place because people are starting to lack the means to pay for their food, medications or education, not because they're denied vacations in Honolulu.

Louise Alker

Riots are because we have an out of touch government.I do not condone the violence.
These youngsters are being ignored.Youth clubs taken away, no jobs,made to work 30 hours a week for their £50 benefits £1 something an hour turning them into slaves,benefits slash for there parents even if working IE tax credits child benefit cuts,no chance of university,colleges closed,coursers cut.I could think of 10 more reasons but do I need too.This government need to take responsibility,they have bought this country to its knees.Always the same when Tories are in power

Denny

So basically give them money OR ELSE? As many of the rioters and looters were teenagers, I very much doubt benefits - which they could not claim - would be a motivating issue. The images on the street do not show people worried about paying their electric bill or their mortgage, but selfish teenagers wanting the latest Nike trainers or HDTVs. As for university, I don't want to derail this topic with a full explanation, but the rise in student fees in no way stops anybody - poor or rich - going to university, as it's not real debt (like a mortgage or a credit card) and nobody has to pay anything back if they can't afford to do so.

The last thing this, or any other government, should do is pander to those causing the damage. The government should be stood right behind those doing the right thing, those whose homes or livelihoods have been destroyed by this epidemic of greed and lawlessness.

Read more...

Pascual

Well, if you match expenditure cuts to reports of incidents in this page: http://www.guardian.co.uk/news/datablog/2011/aug/09/uk-riots-incident-listed-mapped, and then calculate the number of incidents per zone (local authority) , you get this:
https://docs.google.com/uc?export=download&id=0B5R3O3atNaCgem5KTUZxcCtwZjZ0QzJYamtwNXZhWlluK3U0PQ&revision=true

Of course, despite the clear relation between bigger cuts and more incidents, one may argue that there are many omitted variables that may explain this pattern, so it is hard to give this a causal interpretation without more controls.

Dave Hodgkinson

This is a more current, iconic image:

http://images.mirror.co.uk/upl/m4/aug2011/6/1/a-woman-jumps-from-burning-building-in-surrey-street-london-pic-wenn-109218867.jpg

Mike Lemmer

Is there a similar correlation between government austerity & rioting? Take a country that consistently spent 10% GDP: would it have fewer riots than a country that spent 20% GDP, then cut it down to 15% GDP? I'd like to know whether the root problem is "government spent too little" or "government promised too much".

Mojo

The Guardian has already done this: http://www.guardian.co.uk/news/datablog/interactive/2011/aug/10/poverty-riots-mapped

Alex

Then again, deep cuts probably only occur in times of financial instabilty and economic hardship: Times that would already suggest some inclination to social unrest.

Seems like a murder and icecream sales thing to me.

Joshua Northey

I am a little confused as to why ordinary citizens don't go out and beat up the rioters, there cannot be that many of them? The law abiding citizens surely outnumber the rioters?

Particularly if they are lighting cars on fire or looting stores/homes. I think of a dozen teenagers were caught trying to light a car on fire on my block the residents would beat the crap out them. People are not hard to scare off when they know they are breaking the law. They are already mentally on the defensive.

Will

This is why people aren't simply "beating up" the rioters - http://www.bbc.co.uk/news/uk-england-birmingham-14471405

Plus, aren't the people who are rioting the same people who are more inclined towards violence anyway, so those who aren't causing damage are peaceful, so won't fight back in the same way?

Also, this isn't just a case of "a dozen teenagers" - over 500 people were arrested in one night.

I'm just glad us Scots aren't at it too...

James

I doubt that that's the entire reason. I suspect that the fact that British law has for decades criminalized acts of self-defense might be a greater factor.

Natalie

That would suggest that Americans would be more likely to go an beat up rioters, but that generally doesn't happen either. And the riots that have happened in my neck of the woods have been about infinitely stupider issues - mostly winning or losing a college championship.

Ricardo

While budget cuts and riots may be correlated, they are not necessarily causal. It is equally possible that cuts in police service have CAUSED apathy in enforcement thereby encouraging the riots.

ZB

Didn't read your post before posting my own.

But... yeah. So much for the scientific method, huh?

jocky scot

These riots are ENGLISH riots. The rest of the UK are not taking part.

ZB

Correlation does not equal causation. Scientists are supposed to know this.

I'm curious what, if any, socio/economic/political factors led to budget cuts?

horn

There haven't actually been any cuts yet, Livingstone, et al are bemoaning 'phantom cuts' or future cuts.
http://www.spectator.co.uk/coffeehouse/7122543/what-you-need-to-know-ahead-of-tomorrows-growth-figures.thtml
Average monthly government expenditure in the 12 months ending on June 30 2011 was £51bn compared to £48.5bn in the same period a year earlier, over 5% MORE spending.

According to the Chancellor of the Exchequer, England's net debt is scheduled to increase 51% going forward.

Decreases from a larger baseline predicted figure are not actual cuts.

anna moffatt

Great piece, freakonomics, you're bang on the money. Riots follow recession - the participants don't have to be consciously aware of this fact, it just happens naturally, like the herd mentality on the stock market. Which, more generally, reafirms the inteligence of crowds.

Moreover, its often overlooked that teenagers between the ages of 16-18 recieve no benefits from the state, so in times of high unemployment and cut backs to further education they are literally left with nothing. If this played a part in last weeks riots, the con/dems should think very carefully before stripping back benefits, that might play well with the readership of the Daily Mail but could make last weeks events in London, Birmingham and Manchester seem like a tame episode of Dale Winton's Supermarket Sweep.

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