Does political stability really make the economy happy?

- Japan has had 34 Prime Ministers in 75 years, but its economy amazes the world, India was ruled by one party for three decades of independence, but the growth rate remained the lowest.

Political stability leads to certain developments. It is often argued that it gives a definite direction to the society for a long time and benefits every section of the society. However, there is no sure measure of whether this stability guarantees growth or not. Yes, there are evidences that even in the midst of stability, the growth rate of the economy has been poor and even in the midst of instability, the growth has been plummeting!

The discussion is going on that Prime Minister Shi Sunak has become the third Prime Minister in the calendar year 2022 in Britain. This is the fourth Prime Minister since David Cameron lost the November 2016 referendum on whether Britain should leave the European Union. Political instability has gripped Britain. In this period, Theresa May, Boris Johnson, Liz Tuss and now Shi Sunak have become Prime Ministers. The condition of Britain is getting worse during Corona period and after it. Due to inflation, people are forced to live on government assistance. Britain's economy is suffering from the highest inflation in four decades and the worst recession in two decades!

World Bank Lead Economist Zahid Hussain writes in his analysis of 2014 that political instability and economic development are closely linked but political stability alone does not necessarily lead to economic development. Along with political stability, good governance is equally important. Even if there is a political party or a coalition government, if the government takes important decisions, implements them properly, development, control over inflation and investment continue to be available.

On the other hand, Ari Eisen writes in his 2011 International Monetary Fund working paper that political instability has a definite impact on economic growth. In this paper, the economy of 169 countries has been studied on the basis of data from 1960 to 2004. Eisen further states that there is a need to be more vigilant about economic policies in countries with political instability.

However, the most striking of the exceptional economies is Japan. Japan is the third largest economy in the world. The economy is export-led and has recovered from the effects of the US nuclear attack in 1945. Japan is likely to compete with African countries in terms of political instability. In the 122-year period from 1900 to 2022, a total of 69 prime ministers have changed in Japan, that is, one prime minister every two years! After Japan adopted a new constitution in 1947, Kishida is the 34th Prime Minister, that is, a new Prime Minister every two and a half years! During this period the Japanese economy continued to grow with investment there and Japanese technology dominated the world.

If only economic development is the criterion, then economy and political instability are also found to be quite contradictory. India was ruled by a single party for the first 30 years of independence but the economy did not grow more than 3 to 3.5 percent. On the other hand, in a small country like Vietnam, which was ruled by a single party from 1997-2006, inflation was under control, with growth rates being the fastest in Asia. So political instability or stability is not the factor of economic development. India's economy has been growing continuously since 1991 at a rapid rate, but in the 30 years since then, every time there has been a political coalition government, not a one-party rule.

Zahid Hussain argues that the growth and prosperity of an economy is determined not by political stability but by the short-sightedness of a political leader and the permanence of the strategy he implements. Economists have been studying political stability and its economic impact for years. The rules of competition apply not only to business but also to things like politics, education, innovation. Political stability leads to complacency and lack of competition. People want change when there is competition. Politics, business, culture.. the desire for change on every front gives people the drive to find greater opportunities. When political stability lasts for a long time, the lack of alternatives or lack of alternatives affects freedom and because of this sometimes political change also stops.