Climate Vulnerability, Fiscal Risk, and Religious Tensions: Evidence from 100 Countries!

In our recent update working paper, Impact of Climate Vulnerability on Fiscal Risk: Do Political Stability and Financial Development Matter?, written with John Beirne, Donghyun Park, and Gazi Salah Uddin, we show for the first time that the political subdimension of religious tensions sharply magnifies this impact—doubling risk premia and ratings deterioration in vulnerable countries. This disaggregated institutional lens offers new policy levers and expands the theory of fiscal resilience.

The working paper is available on SSRN:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4943355

What are the countries that experienced such religious tension risks? The distribution is as follows, so will use the median of 5. The values below 5 for the high religious tension ratings:

The following countries experience episodes of religious tensions:

Let me put the Stata code below for pedagogical purposes:

// Run everything between preserve and restore

xtset imfcode period

summ rel, detail

encode   country, generate(CN)
kountry  country, from(iso3c)
rename   NAMES_STD cn
encode   cn, generate(cnnum)

preserve 

summ period
  local x1 = `r(min)'
  local x2 = `r(max)'
heatplot rel i.cnnum period if rel<=4 & inc==4, ///
 yscale(noline) ///
 ylabel(, nogrid labsize(*0.75)) ///
 xlabel(`x1'(5)`x2', labsize(*0.75) angle(vertical) nogrid) ///
 color(plasma) ///  
 levels(8) ///
  ramp(right  space(14)  format(%4.2f)) ///
  p(lcolor(black%10) lwidth(*0.1)) ///
  ytitle("") ///
  xtitle("") ///
  xdiscrete name(relQ2inc4, replace) ///
 title("Religious tension risks (below Q2) in high income countries") ///
  note("Data source: ICRG dataset, PRS group.", ///
  size(vsmall))
restore

preserve
summ period
  local x1 = `r(min)'
  local x2 = `r(max)'
heatplot rel i.cnnum period if rel<=4 & inc==3, ///
 yscale(noline) ///
 ylabel(, nogrid labsize(*0.75)) ///
 xlabel(`x1'(5)`x2', labsize(*0.75) angle(vertical) nogrid) ///
 color(plasma) ///  
 levels(8) ///
  ramp(right  space(14)  format(%4.2f)) ///
  p(lcolor(black%10) lwidth(*0.1)) ///
  ytitle("") ///
  xtitle("") ///
  xdiscrete name(relQ2inc3, replace) ///
 title("Religious tension risks (below Q2) in upper middle income countries") ///
  note("Data source: ICRG dataset, PRS group.", ///
  size(vsmall))
restore

preserve
summ period
  local x1 = `r(min)'
  local x2 = `r(max)'
heatplot rel i.cnnum period if rel<=4 & inc==2, ///
 yscale(noline) ///
 ylabel(, nogrid labsize(*0.75)) ///
 xlabel(`x1'(5)`x2', labsize(*0.75) angle(vertical) nogrid) ///
 color(plasma) ///  
 levels(8) ///
  ramp(right  space(14)  format(%4.2f)) ///
  p(lcolor(black%10) lwidth(*0.1)) ///
  ytitle("") ///
  xtitle("") ///
  xdiscrete name(relQ2inc2, replace) ///
 title("Religious tension risks (below Q2) in lower middle income countries") ///
  note("Data source: ICRG dataset, PRS group.", ///
  size(vsmall))
restore

Thanks for your attention. Comments and remarks are welcome. My other blogs on climate risk are susceptible to arouse your curiosity:

https://www.jamelsaadaoui.com/tag/climate-risk