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How is democracy linked to economic development?

Keshia Landsbury

Hey there!

Democracy and economic development are highly correlated to one another. The more democratic a country is, the higher its chances are of experiencing long-term economic growth. There are a few reasons for this, which I will try to explain below.

Firstly, democracy ensures political stability. In a democratic country, the government is elected by the people, and power changes hands peacefully as per the Constitution. This ensures that the rule of law is followed and that political decisions are taken in the interest of the people. This stability, in turn, attracts foreign investment, which leads to a general improvement in the country's economic progress.

Secondly, democracy helps eradicate corruption. In a democratic set-up, there is greater transparency and accountability, and corruption is less prevalent. This is because democratic institutions like a free press, an independent judiciary, and a vibrant civil society help keep the government in check. Corruption, on the other hand, stifles economic growth by diverting resources away from productive uses.

Thirdly, democracy promotes a healthy environment for entrepreneurship. In a democratic country, businesses are free to operate within the framework of laws and regulations that are enforced equally across all members of society. There are fewer barriers to entry and exit, and people are free to start their businesses and make investments as per their will. This, in turn, leads to the creation of more job opportunities, increased output, and ultimately, economic growth.

Fourthly, democracy ensures equitable distribution of wealth. In a democratic society, the government has an obligation to provide basic social services like healthcare, education, and infrastructure to all members of society. This ensures that everyone has access to an equal opportunity for a better life. As a result, people are more likely to invest in themselves and their children, leading to higher levels of human capital and ultimately, economic growth.

All in all, a democratic society provides the necessary framework for economic growth through political stability, reduced corruption, a conducive environment for entrepreneurship, and equitable distribution of resources. Countries that have embraced democracy have seen their economies grow and prosper, and there is no doubt that the two are inextricably linked.

Hope this helps!