Why Political Stability is Important for an Economy:
- Encourages Investment: Stability attracts domestic and foreign investors, reducing economic risks.
- Efficient Resource Allocation: Governments can focus on productive policies instead of managing conflicts.
- Reduces Uncertainty: Political stability ensures consistent policies, promoting business confidence and economic growth.
- Strong Institutions: Stable governments maintain legal systems, protect property rights, and enforce contracts.
- Retains Skilled Labor: Stability prevents "brain drain" and attracts skilled professionals.