Two models for a magnetosphere-ionosphere coupling feedback instability in the lower magnetosphere are studied. In both models the instability arises because of the generation of an Alfvén wave from growing arc-like structures in the ionospheric conductivity. The first model is based on the modulation of precipitating electrons by field-aligned currents of the upward moving Alfvén wave (Modulation Model). The second model takes into consideration the reflection of the Alfvén wave from a maximum of the Alfvén velocity at about 3000 km altitude (Reflection Model). The growth of structures in both models takes place when the ionization function associated with upward field aligned current is shifted from the edges of enhanced conductivity structures to their centers. Such a shift arises because the structures move along the ionosphere at a velocity different from the E×B drift velocity. As a result, field-aligned currents of upward propagating Alfvén wave at some altitude appear shifted with respect to the edges of the structures. Although both models may work, the growth rate for the first model, as based on the modulation of the precipitating accelerated electrons, for typical conditions, may be tens or more times larger than that for the second model based on the Alfvén wave reflection. The proposed models can provide the growth of both single and periodic structures. When applied to auroral arc generation the studied instability leads to high growth rates and narrow arcs. The physical mechanism is mostly suitable for the generation of auroral arcs with widths of the order of 1 km and less. The growth rate of the instability for such structures can be as large as 0.3 s⁻¹. In the case of periodic structures, their motion must lead to the generation of magnetic pulsations with periods of about 1–6 s, which is close to the expected period of Alfvén resonant oscillations in the lower magnetosphere. However, these oscillations (for the first and most effective model MM) are not exactly Alfvén resonant oscillations. These oscillations are modulations in the ionospheric density, which propagate along the ionospheric currents and not along the magnetic field lines.