OPNION: Political stability under one party rule detrimental to economy in the long run - World Bank

The World Bank, 1 Jun 2014
Some see political stability as a condition that not only precludes any form of change, but also demoralizes the public. Innovation and ingenuity take a backseat. Many seek change in all sectors of life--politics, business, culture--in order to have a brighter future through better opportunities. Of course change is always risky. Yet it is necessary. Political stability can take the form of complacency and stagnation that does not allow competition. The principles of competition do not only apply to business. Competition can be applied in everything – political systems, education, business, innovation, even arts. Political stability in this case refers to the lack of real competition for the governing elite. The ‘politically stable’ system enforces stringent barriers to personal freedoms. Similarly, other freedoms such as freedom of press, freedom of religion, access to the internet, and political dissent are also truncated. This breeds abuse of power and corruption.
When political stability comes with having one party or a coalition of parties in office for a long time, it may eventually be detrimental. The economy may do well in terms of attracting foreign direct investment because stability means a predictable political environment. However, other aspects of the society might suffer because of complacency, lack of competition, and opacity. The economy eventually suffers because of these. Consequently, stable governments do not necessarily lead to higher economic growth. India is another case in point. India’s performance on the economic front in the first 30 years of post-independence era, which epitomized political stability, exhibited 3 to 3.5 percent level of economic growth, lowest in the last sixty years. In contrast, in the last 20 years when India saw as many as four Prime Ministers, industrial growth rates jumped to double digits, something that had not happened before. Full story
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