HI6008 Semester 3: Analyzing Political Stability and Economic Progress

This report analyzes the intricate relationship between political stability and economic progress. It begins with an introduction highlighting the importance of a stable political environment for continuous economic development. The report's objective is to identify the connection between economic progress and political stability, exploring how these two factors are profoundly interconnected. The scope of the project involves analyzing the relation between political stability and economic development, with a focus on the causes of instability and its effects on economic growth. The literature review emphasizes the importance of a stable government for good governance, national cohesion, and economic growth. The research methodology is primarily qualitative, using secondary data from various sources to investigate the relationship. The report outlines the research design, approach, and limitations, including the challenges associated with qualitative research. It also includes a time schedule for the research and concludes with a summary of the findings.

Running head: RELATIONSHIP BETWEEN POLITICAL STABILITY AND ECONOMIC
PROGRESS 1
Relationship between Political Stability and Economic Progress

RELATIONSHIP BETWEEN POLITICAL STABILITY AND ECONOMIC PROGRESS 2
Table of Contents
Introduction................................................................................................................................3
Project Objective........................................................................................................................3
Project Scope..............................................................................................................................4
Literature Review.......................................................................................................................4
Research gap..........................................................................................................................6
Hypothesis..............................................................................................................................7
Research Questions....................................................................................................................7
Primary Question...................................................................................................................7
Secondary Question...............................................................................................................7
Research Design and Methodology...........................................................................................7
Qualitative Research..............................................................................................................7
Research Approach............................................................................................................8
Research Limitations..................................................................................................................8
Time Schedule............................................................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................11

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Introduction
Political behavior is any action by any follower of a society that disturbs the
distribution of the power to create decisions for that community. A balanced political
leadership advertently leads to continuous economic development (Nur-Tegin & Czap, 2012).
Stability comes with its perquisites; assurance of a positive marketplace, increased savings
and development of a nation’s intellectual capital, which are all substantial indicators of
improvement in any economy (Fatas & Mihov, 2013). On the other hand, instability at the
influences of civil conflict and non-compliance condone weakness, underutilization of the
capability of the adolescence, discourage savings, occupation and creation of revenue. This is
a red banner being deliberately abandoned at the stakeholders and tax financiers prohibiting
them from undertaking any savings and work. This in turn exploits the development of the
economy (Lewis, 2013). Moreover, by political stability, one tries to comprehend the position
or the state where public can cooperate easily and responsively by following the guidelines
and legislations. When the persons get to offer their say in running the country, political
stability is being generated. The aim of the report is to analyze the relationship between the
political stability of a country and economic development. It also focusses on how the data
has been collected and also emphasizes its focus on the limitations of the research.
Project Objective
The major objective of this report is to recognize the connection between the economic
progress and political stability. It further emphasizes its focus on how the economic
development and political stability are profoundly interconnected. It will also further
investigate about impact of stability and instability aspects of politics on the economic
development of the nation. The report also addresses how political constancy can be
accomplished via persecution or through having a governmental party in position that does

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not have to participate to be re-elected. It should also scrutinize the core causes of the
unbalanced political situations in order to achieve the substantial growth.
Project Scope
The scope of the project would be to analyze the relation between political stability and
economic development of a country. The scope of the project is extensive because this report
could be used as a valuable source of information in order to have proper knowledge about
the causes of the instability in the political scenario of the situation and for determining the
variations of economic growth as per the situations of political situation. The topic will be
beneficial for the individuals as this will help them in gaining sufficient knowledge regarding
the transformations of the economic growth and how such economic progress can be valuable
for the country.
Literature Review
Economic progress and political constancy are deeply connected. The ambiguity
associated with an unstable political atmosphere may decrease savings and the rapidity of
economic development. However, reduced financial performance may lead to management
failure and governmental conflict. The selection of a constitutionally stable government is
vital for good governance, national cohesion and economic growth (Cox & Weingast, 2018).
Only a stable administration can make sure social coordination, law and order, the rule of
regulation and good governance that are fundamentals to economic growth. Moreover, it can
also be said that political stability is most significant for financial policy generating,
particularly for implementation of long-term strategies that are enormously imperative for
socio-economic expansion (The Sunday Times, 2018). In addition, the next management
must have a long-term viewpoint on strategies that would certify constant economic growth.
These procedures include good financial, monetary and exchange rate procedures. In regard,

RELATIONSHIP BETWEEN POLITICAL STABILITY AND ECONOMIC PROGRESS 5
there must be constancy, inevitability and probability of economic guidelines. Bold and
detested decision making is required to reestablish economic constancy and to put in position
economic procedures that are valuable in the long run.
Political stability is being generated by the rebellions, eliminations and coups. There
is a positive and a very substantial relationship between the economic growth and political
stability (Macatta, 2017). The administrations should investigate about the root causes of the
unbalanced political environment and should also try to alleviate the effects of the variability
so that a continued growth can be accomplished in the economy. In addition, political
stability is the stability and honesty of the government body in the nation which is presiding
at present. It rather covers four measurements which are steady government, constant
political structure, internal regulations and rules and external constancy. However, there is
also a strong connection between foreign investment and economic development. Greater
inflows of foreign investments are essential for the nation to accomplish a high trajectory of
economic development. Furthermore, rapid economic progress cannot be attained with
domestic assets and reserved investment alone. It is rather vital to attract enormous foreign
direct savings for instituting export industries. FDI in such savings are risk free to the nation
and thereby bring with it the benefits of innovative technology, managing practices and
assured marketplaces (Caselli & Tesei, 2016).
Numerous policies were being adopted aiming at accomplishing rapid conversion of
the socio-economic structure and refining the quality of life of women and men comprising
children and youths of which sensitization of the community at huge for the objective of
realizing effective execution of these procedures was accorded high importance. A steady
political scenario is one where the dominant management is being preferred by the population
and thereby does not experience solid pointers of societal disturbance (Aisen & Veiga, 2013).
The connection between financial development and stability denotes to the method in which

RELATIONSHIP BETWEEN POLITICAL STABILITY AND ECONOMIC PROGRESS 6
the governmental constancy of a country can lead to its economic development. The shared
denominator and the utmost noticeable connection amongst financial progress and constancy
is the fact that a constant situation nurtures economic development. However, the insecurity
related with an unbalanced political atmosphere may decrease savings and the rapidity of
economic growth. In other words, a political unstable situation generally means that the
administration is exploiting or mishandling the resources of the country or the assets of the
firm are not being used to their optimum capability or in an approach whereby economic
expansion could be exploited. The more will be the foreign direct investments the more it will
lead to expansion and growth but unbalanced political environment lowers down the foreign
direct investment and thereby the chances of evolution. The lack of constancy in the economy
will lead to lower travelers, lower savings and a lower amount of incomes. An unstable
government would not be able to undertake the alterations, which would improve the
productivity and efficiency in the long run (Hart & Spero, 2013). Furthermore, the political
variability, unpredictable economic policies and insufficient economic procedures and
inadequate trained employees for hi-tech industry have discouraged foreign shareholders in
thepast. Only a stable government can resolve the issues in order to make the nation attractive
for foreign investment. In addition, the constancy and probability in economic procedures and
political stability are requirements for attracting FDI (Masry, 2015). Political stability is
being considered as a positive reflection to alleviate economic variations and applying of
democracy guidelines being the major element for economic growth.
Research gap
Based upon the previous literature analysis, it has been noticed, that the researchers
had focused upon various aspects associated with the impact on the economic stability of a
country. hence, under such circumstances, political analysis is not given much importance,
due to the presence of different human perceptions on that topic. This has stood as a major

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research gap in the literature, over the years. Hence, this paper would focus on analyzing the
impact of only political conditions of a country over its economic stability.
Hypothesis
Based upon the research gap, the associated hypothesis that could be illustrated is as
follows:
H0: political instability has a negative relation on economic stability
H1: political instability has a positive relation on economic stability
Research Questions
Primary Question
 Is political stability essential for proper economic development? If yes, how does
political stability contributes to proper economic development?
Secondary Question
 Can political instability hurt economic growth and development? What are the
impacts of corruption on economic development?
 Are democracy, political stability, globalization and internationalization are inter-
linked and together they contribute to effective economic development?
Research Design and Methodology
Qualitative Research
Research methodology helps in representing the outline of the essentials of the
complete investigation. It thereby involves research method, research design as well as the
data gathering process for the specific research study (Neuman, 2013). The methodology is
being assumed to be appropriate for achieving the research goals and objectives. The

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objective of conducting the research is to determine the reaction to the research questions.
The researcher has selected qualitative method for analysis of the data.
Research Approach
In this research study, the researcher will be using secondary data for investigating
about the relationship between the economic progress and political stability. In addition, the
researcher has concentrated on collection of secondary data so that the research objectives
can be accomplished. Furthermore, the researcher plans to recognize the reasons for the
deeply connection between the political constancy and economic development. In addition,
the secondary data can be gathered from journals, books, trusted websites, academic papers
and newspaper articles etc. The researcher would use qualitative research because this
research would help them in enhancing the quality of the information (Taylor, Bogdan &
DeVault, 2015). Additionally, the researcher has found this research as analytical as he or she
has to use the facts and information that are already accessible. The researchers generally
conduct the research on the basis of diverse types of research philosophies like realism,
positivism, interpretivism and pragmatism. In this case, the researcher will be using the
positivist research as its emphasizes its focus on the significance of carrying out a qualitative
research so that these can be tested for applicability and thereby the final outcomes of the
data analysis procedure can be compared with the information specified in the literature
review (Lewis, 2015). The researcher has preferred qualitative data because it will help them
to gain adequate knowledge regarding the political stability and economic growth and thereby
will also benefit the researcher to achieve the research goals and objectives.
Research Limitations
The qualitative research that has been selected for this research study is also
associated with several limitations. The quality of the information which is being collected in
qualitative research is highly independent (Silverman, 2016). This is where the private nature

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of information gathering in qualitative research can also be a negative constituent of the
procedure. In addition, having individual viewpoints and comprising instinctive decisions can
rather lead to unbelievably comprehensive information. It can further lead to information that
is widespread or even erroneous because of its belief on investigator subjectivisms (Smith,
2015). Furthermore, data inflexibility is more difficult to measure and validate in case of
qualitative research. In regard, since the perceptions of the individuals are often the substance
of the information that is being gathered in qualitative research, it is thereby more
challenging to prove that there is inflexibility in the information that is shared (Ritchie,
Lewis, Nicholls & Ormston, 2013).
Time Schedule
Week 1 Week 2 Week 3 Week 4 Week 5
Literature
Review
Qualitative
Research
Data
Collection
Limitations
of the
Research
Conclusion
The economic development and political stability are interconnected and thereby it
has major effects on the economic growth of the country. It has been observed that by
political stability, one tries to realize the position or the state where public can collaborate
effortlessly and quickly by following the rules and legislations. It can also be said that
political stability is most important for financial policy producing, mostly for implementation
of long-term policies that are extremely imperative for socio-economic development. It has
also been observed that the researcher will be using qualitative data for carrying out the

RELATIONSHIP BETWEEN POLITICAL STABILITY AND ECONOMIC PROGRESS 10
research procedure smoothly and effectively without any hassle. In addition, the qualitative
research can help the researcher in gaining sufficient knowledge regarding the connection
between the political constancy and economic development of the country.

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References
Aisen, A., & Veiga, F. J. (2013). How does political instability affect economic growth?
European Journal of Political Economy, 29, 151-167.
Caselli, F., & Tesei, A. (2016). Resource windfalls, political regimes, and political
stability. Review of Economics and Statistics, 98(3), 573-590.
Cox, G. W., & Weingast, B. R. (2018). Executive Constraint, Political Stability, and
Economic Growth. Comparative Political Studies, 51(3), 279-303.
Fatas, A., & Mihov, I. (2013). Policy volatility, institutions, and economic growth. Review of
Economics and Statistics, 95(2), 362-376.
Hart, J. A., & Spero, J. E. (2013). The politics of international economic relations. Abingdon,
Oxfordshire: Routledge.
Lewis, S. (2015). Qualitative inquiry and research design: Choosing among five
approaches. Health promotion practice, 16(4), 473-475.
Lewis, W. A. (2013). Theory of economic growth. Abingdon, Oxfordshire: Routledge.
Macatta, M. (2017). Political Stability and Economic Development are deeply connected.
Retrieved from
Masry, M. (2015). The role of political stability in achieving economic development. Journal
of Economics and Sustainable Development, 6(16).
Neuman, W. L. (2013). Social research methods: Qualitative and quantitative approaches.
London, United Kingdom: Pearson education.
Nur-Tegin, K., & Czap, H. J. (2012). Corruption: Democracy, autocracy, and political
stability. Economic Analysis and Policy, 42(1), 51-66.

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Ritchie, J., Lewis, J., Nicholls, C. M., & Ormston, R. (Eds.). (2013). Qualitative research
practice: A guide for social science students and researchers. California, United
States: Sage.
Silverman, D. (Ed.). (2016). Qualitative research. California, United States: Sage.
Smith, J. A. (Ed.). (2015). Qualitative psychology: A practical guide to research methods.
California, United States: Sage.
Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research
methods: A guidebook and resource. New Jersey, United States: John Wiley & Sons.
The Sunday Times. (2018). Political stability vital for governance and development.
Retrieved from