The Relationship Between Political Stability and Economic Growth Essay

The Relationship Between Political Stability and Economic Growth - Essay Example This paper questions the widely accepted role of political stability in promoting the growth of the economy. Political stability in any country may offer a peaceful environment for investment to take place. In addition to this, the stability may also provide a good ground where impunity is tolerated. Stable governance and politics are by no doubt a means through which economic growth takes place. With a peaceful political environment, the government can formulate its agendas. Good investing policies attract investors in the country and makes citizens willing to work hard and improve the country’s economic growth. It is seen that democracy in developed and developing countries foster the growth in the economy compared to the countries that are non-democratic. It can be argued that stability in politics of any nation can affect the rate at which the country’s economic growth takes place. In addition to this, the level of investment can be altered through increasing the confidence level of investors in that country. The democratic effect on investment is only tentative. In countries where political stability is practiced, a direct economic growth is realized through positive effect on the rates of investments. Investors will only invest their resources in a country where peace exists, and they are assured of their properties. In contrast to this, economists and investors refer to political instability as a malaise that has a serious harm to the economic growth of the nation. Irrespective of the political regimes, if a country is stable and does not worry about the radical changes of regimes and conflicts, the citizens do concentrate on working hard in running their businesses, saving and investing in other economic activities.