What are the effects of political instability on economic development? 🔊
Political instability adversely affects economic development by creating uncertainty for investors and disrupting social structures. When a government faces crises, such as corruption, civil unrest, or conflict, the resulting unpredictability can deter both domestic and foreign investments. This instability often leads to inadequate infrastructure, reduced public services, and diminished economic opportunities. Over time, prolonged instability can undermine the rule of law and erode public trust in institutions, further stifling development efforts. In contrast, stable political environments tend to attract investment and foster economic growth, highlighting the interplay between governance and development.
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