Political unrest refers to a state of social and political instability marked by protests, strikes, and other forms of civil disobedience. It can be triggered by economic and social factors that undermine people’s quality of life and faith in the government, such as a rise in fuel and food prices or austerity reforms, or events that expose corruption and abuse of power by authorities. It also tends to rise during periods of slowing or weakening economic growth and during recessions, as well as when subjective well-being declines due to deteriorating living conditions and a growing gap between aspirations and achievement (see Figure 1).
In addition to causing disruptions in the lives of citizens, political unrest can have an impact on a country’s economy. Investors are often wary of a potential crisis and may pull out of a market or sell off assets. Moreover, the presence of unrest can lead to a decline in production, which can affect supply chains and workforce productivity.
Identifying signs of unrest is critical to staying ahead of the curve. Be on the lookout for increased tensions and heightened frustration, political debate and heated discussions, and news coverage of planned demonstrations. Moreover, be prepared for the possibility of violence that can spill over into areas beyond the target of the protest. For example, the mass shooting at the Democratic National Convention in Chicago’s Back of the Yards neighborhood illustrates that areas in a state of unrest can quickly become flashpoints for other incidents.
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