Political Stability Vs FDI
Political Stability Vs External Debts
Political Stability Vs GDP
Political instability is at two levels: 1. When Senate and National Assembly are in disagreeing and no bills get through; 2. When people are shooting and killing each other and there is Aerial bombing going-on.
For number one condition: FDI might slow down, GDP growth might slow down; and External Debts might increase, with repayments slowing down due to slower growth of GDP. In number two condition: FDI could be non-existent; GDP growth could stop or contact and External Debt could be un-paid liability with no formal government to take responsibility.
When the level of democracy increases positively affects economic growth. An increase in the level of democracy will lead to an increase in the rate of economic growth. The politically motivated violence and the anti government protests destroy the economic growth of countries. Interaction between democracy and economic development implies the presence of the effect of political freedom on growth and its influence on the standard of living.In the developing countries. We would detect four dimensions of political instability: the level of democracy, the politically motivated violence, the anti government protests and the instability with in the governments.
Political stability does necessarily positively affect the level of production, this goes without saying consequently raising exporting capacities of certain country, external debts often are associated with low production and productivity.
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