To what extent does political instability influence inequality

Introduction

In recent decades, there are increasing emphasis on democracies and freedom, however, studies continuously reported that these are hugely influenced by political stability (Bale, 2011). In the meantime, the economic propensity is positively correlated to political stability (Alesina et al., 1996). In light of recent events around the globe, taking China and the United Kingdom as the subject of this study, I would like to study to what extent political instability influences inequality. In a society where there is a reduction in the political instability, there often is witnessed an improved environment which is needed by everyone in the community to advance their interests, hence giving the best environment for carrying out personal businesses. However, according to Deng et al., (1997), in a state where there is political instability, the aforementioned privilege of economic gains cannot be enjoyed by the country because it is during this time of instability that there are a lot of economic chaos witnessed in the nation, making some individuals in the country to lose some of the wealth they had before the war of politics broke out. Also, in some cases, political instability may cause instabilities in the world of business where we see individuals can no longer conduct their businesses freely or on a daily basis, and will only have to wait until there is a lull in the war between the political parties in the nation before they can have the chance to freely conduct their business. In the contemporary world, the United Kingdom is one of the countries which face the risk of political instability after its famous withdrawal from the European Union, (E.U.). Subsequently, this looming political instability in the country could be the potential reason for the increase in inequality in the country. This essay will first look at the definition of political instability and define inequality with respect to the subject area. Following by studying examples of China and the United Kingdom political events and how it might have or might not have influence inequality.

Political Instability’s Definition

Alesina et al. (1996), defined as the propensity of a government to collapse. However, Carmignani (2003) suggests that there are two kinds of political instability, the first type includes the phenomenon like large scales of riots, deaths, and assassinations which are politically motivated and revolutions. The second type includes termination of government and electoral surprises. According to Carmignani, (2003), these phenomenon generate uncertainty regarding the stability of policymakers and institutions, hence uncertainty regarding the future course of a country’s economic policy, security of property rights, productivity of capital and other production inputs, the flow of financial funds between nations and, in general, the characterization of the social and economic structures (Busch et al., 2016). As such, this essay will adopt the two definitions as to define political instability in which it refers to events or phenomenon that led to the propensity of a government collapse.

Definition of Inequality

As there are different types of inequality, due to word limits for this essay, this essay will mainly focus on economic inequality. According to the Afonso, LaFleur and Alarcón (2015), there are two perspectives to look at economic inequality, the first view deals with the outcomes’ inequality in the materialistic dimensions of the people’s well-being and could be as a result of happenings beyond one’s control as well as talent and effort. Another view is concerned with the opportunities’ inequalities, this means, it has its focus on the happenings which are beyond one’s control and the outcomes that come with the events. Outcome’s inequalities happen when people in the country do not poses the same materialistic wealth and do not have the same income levels and do not live under the same living conditions. For inequality of opportunity, Alkire et al. (2015) proposed that well-being should be measured in terms of the doings of the people and their freedom to choose how to act and operate.

The occurrence of political instability

In many nations, political instability is as a result of the biggest party in the parliament having the inability to pass legislation. In a nation, as witnessed in many countries, political instability will always occur as a result of the situation where a political party could be the biggest in the country but may have fewer legislators in the parliament to pass the motions and make amendments to Acts which affect the country (Evans, 2011). This situation has the potential of bringing the country down to its knees and might require the formation of a coalition government. According to Busch et al., (2016a), an example was the case in which the Conservative Party had to join a coalition government with the Liberal Democrats (McMichael, 2016). It is for this that the former may have found it hard to implement some of its promises to the people; because, as it may have wanted to implement the promises it made to the electorate, the party also had t consider the wishes of their coalition partner (Wang, 2014). Therefore, there are various effects of having a coalition government in the country and the primary one being that the parties involved in the coalition could not be having the same agenda (Westad, 2003). Due to the lack of a common agenda between the parties, it is, therefore, easy to create a level of instability in the country which could, in turn, affect the inequality levels in the nation.

How political instability influences inequality in the U.K. and China

Mao Zedong’s initiation of the Cultural Revolution in China following the takeover of the mainland by the Communists had a huge impact and effect on the people. The reason for these impacts was the high levels of political instability which caused a lot of people in the nation to live with so much uncertainty (Lu, 2004, Meng et al., 2007). This situation led to the purging of so many people from governmental institutions while giving way to other individuals in the society to advance at the expense of the other citizens (Meng et al., 2013). According to Neuhauster, (1968), the level of inequality in the country became so high because, for any economic gains and advancement in the country, one had to be loyal and willing to serve under the leadership of the Communists (Chow, 2015). As a result, people in China, during the periods of 1966 to 1976 faced famine and the loss of property (Brandt et al., 2013). This loss of property was due to the Cultural Revolution which was taking place in the country at that particular time. However, after the death of Mao, China became stable once more. When Deng Xiaoping ascended to power, the nation was able to scrap off the negative effects the Cultural Revolution had imposed on it, and adopted the capitalists’ elements which were considered to be highly beneficial to the citizens of China (Schoenhals, 2015; Christiansen et al., 2014). Due to the change in the system of governance after the death of Mao, China has since then become politically stable. Due to the stability, there has been an improvement in the lives of the citizens and the residents of the country (Pyle, 2016). This improvement is due to the economic growth which is so rapid. As a fact, China is among the fastest growing economies of the world (Teiwes, 2014). It is, therefore, clear to see how political instability, according to Walder et al., (2003), during the Cultural Revolution, in the country denied the nation the chance to grow economically and give the people the chance of conducting their business freely without having to be followers of the Communist Party. It was therefore required for the country to ensure that the high levels of political instability are reduced to give room for the improvement of the people’s lives by offering them equal business platforms (Kwong, 2015).

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The radical and reactionary political changes, like the Cultural Revolution can also lead to further instability which may cause more inequality in the country (Shambaugh, 2013; Sheldon, 2016)). Over the recent years, Europe has seen some changes in the community. According to Busch et al., (2016b), this change is due to the fact that some of its considerate population have disenchanted with some major institutions like the EU (Ottaviano et al., 2014). An example of a country which has disenchanted with a major body in Europe is the United Kingdom. In Europe, the European Union, for some time now, has been seen to be undemocratic (Hix et al., 2016). This situation has led to some of the withdrawal of its member states. This withdrawal is due to the fact that some right-wing political parties which are dominant in Europe have stood for the agenda that the EU be dismantled and the power be returned to the individual national governments. This establishment of politics has led to the battle for supremacy between the parties for and those that are against the dismantle of the European Union. Coyle, (2016), states that it is due to this battle that political parties which are long established were challenged both within and without, and this led to the passage of the Brexit referendum in the U.K (Oehler et al., 2017). Although the effects of the exit from the EU is mild at the moment, economists and sociologists predict that the Brexit will have a long-term devastating effect on the country (Angeli et al., 2016). This long-term effect will be made possible because there will no longer be a free movement of labor from the UK to the EU (Krause et al., 2016). This lack of free movement of labor will in all manner cause an economic inequality in the nation. There are also high chances that there will be high chances of experiencing more political instability in the country (Begg et al., 2016). This further political instability is projected to occur considering the fact that Scotland might decide to leave the United Kingdom as it benefits more from the EU more as compared to the United Kingdom Union (Irwin, 2015. This foreseen political differences could be a shock to the UK, and could lead to more devastating effects to the economy of the country; allowing economic inequality to thrive more in the country, as it already is (Crafts, 2016).

Also, the Brexit brought about a shock in the global markets. This shock had a great significance on the economy of the country. This significance was witnessed by the reduction in the number of investors in the UK. The shock also brought about a shock in the political scenes of the United Kingdom (Driffield et al., 2016). The passage of the vote to allow for the exit from the EU was shocking to the even those who masterminded the whole campaigns with the thought that it would not be passed by the citizens (Dhingra et al., 2016a; Dhingra et al., 2016c). This act of leaving the European Union meant that the whole world had to be prepared for some changes in the global markets to allow room for a smooth transition. After exiting from the EU, David Cameron stepped down as the Prime Minister of the U.K. His resignation meant that there was an uncertainty in the political future of the UK as his successor was being sorted after. Due to the uncertainty in the political scene of the country, and according to Correia, (2016), many companies threatened to leave the UK and this posed a major threat to the people of the UK considering that a large number of them are employed by these companies. Without these job opportunities, it could only have been a matter time before a huge number of individuals in the country started depending on welfares for their well-being. Dhingra et al., (2016b), states that the likelihood of these companies leaving the UK due to the uncertainty in the political stage of the UK would have meant that the UK would have suffered more severe damage and increase the levels of income and economic inequality in the country due to the reduced number of jobs offered in the country (Campos et al., 2015).

Conclusion

After the death of Mao, the Chinese government took steps to ensure that the country bounced back to a more stable position. This transition was made possible by the willingness of the Chinese government to work with the people of China and the other countries in taking measures to ensure that the political instability in the country was reduced hence reducing the shock which the country suffered as a result of the Cultural revolution (Begg et al., 2016). Strong measures were taken to ensure that the economy of the country did not collapse. Also, the campaigns to allow a political stability in China allowed the people to concentrate more on economic development (LU, 2004), rather than concentrating on the political scenes witnessed in the country. If the United Kingdom wants to survive the aftermaths of the Brexit, the government needs to take measures that will ensure there is a stabilization in the political stage of the country. One of the measures the UK needs to take is to ensure the collapse of the economy is prevented. Strong measures like job cuts need to be taken to allow stability in the country and allow the stay of the companies in the country (Wright et al., 2016)However, should the UK fail to stabilize its political stage, the country will suffer a great depression in its economy because there will be a challenge in keeping a large number of its citizens employed. As a result, the low levels of employment could lead to an increase in the income and economic inequality in the country, as it was witnessed in China during the reign of Mao (Schoof et al., 2015). From the points given above, I can, therefore, conclude that indeed the political stability of a country can greatly affect the equality of both the income and the economic equality of the state. It is, therefore, advisable that all countries across the world ensure that there is a stability in their respective states to allow room for economic growth and equality among its households.