Political Instability Definition

7. The Definition of Political Instability and its Measures:

Political Instability Definition: Political Instability has no single definition and in literature variety of definitions were introduced. These definitions can be divided into two general categories. The first category focuses on the frequency of government changes and the second category focuses on the degree of social unrest.
Researchers supporting the first category starts with the work of Lipset (1960) in political science who considered political instability exists when a country has a persistent regime that lasts for more than 25 years whether this regime is democratic or dictatorial.
Then Sanders (1981) introduced political instability as "A political system can be characterized

Political Instability indices designed for reporting political risk in investing countries: Some institutions and companies develop this type of indices in order inform the investors about the political risk available in the investing country. These indices include the Political Risk Services (PRS), International Country Risk Guide (ICRG), and Business Environment Risk Intelligence (BERI). The ICRG includes three subcategories of risk: political, financial, and economic. The ICRG indices data are available on monthly basis for 140 countries since starting in 1984 (Garret Glasser, B.).
Special Indices related to the phenomena of political instability: This type of indices includes the Corruption Perceptions Index of Transparency International, and the political risk and civil liberties indices of Freedom House.
So, it is important to determine the nature of the study and how political instability means in your study, in order to choose the correct indices that help to choose the suitable index (Gale, T.,

The Impact of Political Instability on International Trade: The rise in the level of political risk decreases international trade flows. Oh & Reuveny (2009) claims that as political risk rises due to uncertainty, bilateral trade may decline because of the fear of the traders from the government changes to policies. As the government may issue some decisions for prohibiting trade in some goods and limiting trade in other goods. Moreover, violent conflicts that stemmed from political risk may harm trade, as it may cause damage of goods, delay in the distribution, and destroy also transportation infrastructure. These damages in return mean higher costs to traders, due to higher insurance premiums, in addition to costs beard as a result of longer trade routes or may be as a result of the need of increasing personnel to guard shipments. Because of rising costs, some traders may exit the market and others may raise the prices to cover the higher costs, thus they may face lower demand. Also, the political risk increased due to decline in the quality of the institutions including factors like corruption, socio -economic policies that may result in public discontent, military conflicts, and incapable