What are the implications of political instability for economic growth? 🔊
Political instability has severe implications for economic growth, often deterring investment and fostering uncertainty. When governments face frequent changes, social unrest, or conflict, economic policies can become unpredictable, affecting business confidence. Investors typically seek stable environments to minimize risks, and instability may lead to capital flight or reduced foreign direct investment. Additionally, disrupted governance can hinder essential policymaking, impacting infrastructure, education, and social services. Ultimately, fostering stability is critical to sustaining economic growth and enhancing overall societal prosperity.
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