POLITICAL INSTABILITY AND ECONOMIC GROWTH IN BANGLADESH

Abstract

In political stability ranking is Bangladesh 172nd position with an index of -1.15. This indicates that Bangladesh is mostly affected with political instability. The purpose of this paper is to show the paper to show the how the political instability empirically affects the economic growth of Bangladesh. For this research questionnaires with a sample of 24 people is conducted and results are analyzed with MS Excel, and data from some previous research. Political instability has various forms such as civil war, social unrest, hartals etc. These types of activities occur when there is the difference of suggesting different solution, at the time of transition of governance. The instability affects our all economic variable, such as, exports, imports, price level, tourism sector, human rights etc. This paper provided strong evidences of substantial productivity loss by firms when multiple hartals occur in a week. Though it has been found that firms re-optimize in response to political strikes, they become able to substitute among factors inputs, mostly by decreasing costs on wages and capital consumption. Small industries are mostly affected by these political instabilities. These findings suggest that the relationship between economic growth and political stability are more complex than is widely presumed.

Keywords

• Politics
• Economic development
• Political instability
• Bangladesh Economy
• Hartals