Immigration and Political Instability
Immigration may adversely affect political stability if immigrants are perceived unfavourably by host country populations. Using a large sample of countries this study confirms that a higher immigrant share of a population is associated with decrease in the level of political stability. We further demonstrate that a higher immigrant share leads to increased military spending through the channel of political stability. The negative effect of immigration on political stability appears to be stronger in countries with assimilative citizenship laws. We account for the endogeneity of immigrant share by using an instrument constructed from gravity model estimates.