Does corruption trigger political instability? Evidence on the role of demographics and social cohesion

A breakdown in social cohesion and the resulting political instability have adverse consequences for economic development. While corruption can fuel political instability, not all countries experiencing high levels of corruption
are politically unstable. Given the growing interest in the role of youth in driving political change, this paper examines whether youth unemployment and the youthfulness of the population (the youth bulge) exacerbate the impact of corruption on political instability. Using panel data for over one hundred countries from 1984 to 2022, the analysis reveals that a youth bulge amplifies the adverse effects of corruption on political instability in oil-exporting countries, compared to non-oil-exporting counterparts. This finding challenges the notion that oil rents can effectively be used to buy off potentially dissatisfied groups.