Impact of political protest: A case study of Bangladesh

IDE Research Bulletin


March 2018

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Brief overview or summary of the projects

Political protests in the form of strikes, locally known as hartals, remain quite common in the former Indian subcontinent countries. Such a form of protest is associated with a mass movement intended to cause a total shutdown of economic activities and closure of educational institutes, and often results in coercion, violence, and damage to public and private properties. Hartals have been instrumental in strengthening the democratic progress in sub-continent during and after the anti-colonial struggles. However, even long after the post-colonial periods had ended and democracy restored, hartals remain a prominent part of political culture for this part of the world. Along with Bangladesh, both India and Nepal still face a concerning number of hartals on a yearly basis, and their occurrence have risen quite sharply over the years (Rudolph and Rudolph 1987).

The objective of this study is to understand the impact of political protest in the form hartal and systematically analyzing the impact on the economy. Since hartal negatively impacts outputs, inputs and supply chains, we use a host of indicators—namely stock price as an output indicators and movement of domestic price of essentials as a supply chain indicator—in such a way that these variables encompass all the potential effects on these two aspects of production process. Since occurrence of'hartals' is a high frequency variable (i.e., daily) hence, in order to have a cleaner identification strategy for its impact, particular attention has been paid to those variables where high frequency data is available.