Political instability may impact a country’s development either positively or negatively. With political uncertainty, economic development may be slowed. Investors may be hesitant to invest in a country with political instability. The investors may fear that they will not benefit from their investment. Political instability creates uncertainty that tends to turn away people from being willing to invest in a country. Political uncertainty may also make it difficult for the people in a country to get decent jobs, which could hurt spending and saving. Political instability may make it difficult for critical institutions to function. For example, political instability may hurt the development of a good educational system. The necessary funds needed to provide a strong educational system might not be available.
However, political instability could lead to a change in a government that might turn around an unstable situation. If a new government comes to power and provides more certainty and stability, then a country may benefit from the instability of the previous government. If the new government provides stability, then economic growth may occur with more investment.
Sometimes, political stability leads to less change and development, especially if the government isn’t elected. In these instances, there is little incentive to change. Corruption could also develop. The country’s development could be harmed.
Generally, political stability is desired to help a country’s development. However, it isn’t always necessary and, depending on circumstances, political stability could slow development within a country.