Something that can hardly be ignored is the deep relationship of political stability and favorable economic performance of nations. Political stability provided by strong political institutions, allows the benefits of growth and economic activity reach all social sectors to which requires as a fundamental principle that society adheres to the principles of rule of law, on pain to submit assignments disturbances.
but unknown A striking case is Belgium. A country rich, developed, prosperous heart of the European Union although nonperforming completing 200 days without an elected government and ethnic political divisions more like petty politicians who own the struggle between parties to impose a government project national. While the French-speaking Belgians use their capital to hold together the nascent kingdom, the Flemish, Dutch-speaking, they invent all sorts of gadgets to split populists, who usually are very popular among the grassroots, very perceptive to these kinds of expressions. Such a division between Walloons and Flemings led to the existence of an interim government, responsible for the king, which has limited powers, unable legally to legislate on socio-economic or fiscal measures to promote, in a country with a deficit of 25 billion euros.
And a sign that the political imbalances can be safe routes to greater imbalances in the markets is a warning of the Standard and Poor's to downgrade the debt rating of Belgium. If the interim government can not take economic measures will be necessary in the short term is taken to an elected government able to take such measures before the markets react and take severe retaliation, the style Greek and Irish, so what happens if the political divide persists and uncertainty about the government?
The answer is simple. Belgian debt lose confidence, investors shall be frightening to dispose of their sovereigns, seek out the capital of Belgium, the government will have severe fiscal difficulties that will seek to correct with cuts in social benefits to the Treasury gives its citizens to the expected results : insurrections of the trade unions, strikes and other measures to bring the country made the worst of all worlds. But is it possible that political stability economic stability help?, for a case close enough response, the Colombian sovereign bonds have the highest returns among emerging markets, product markets perspective on the imminence of the investment grade rating to Colombia, and to the perception of political stability that was designed with the change of government in 2010.
The issue of political stability is a matter of respect for democracy. In a liberalized economies concept, why institute a government?, Because the passions of men will not conform to the dictates of reason and justice sin una fuerza coercitiva, en palabras de Hamilton. Pero dicha fuerza coercitiva debe estar desprovista de esas mismas pasiones que busca ajustar al orden.
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