Authoritarian Rulers and Investment

Investments, both local and foreign are paramount for economic growth and development of a nation. A good entrepreneurial environment is necessary to attract investors. Investors are willing to inject their capital in an economy where they are assured of their returns. Authoritarian governments fall short of such economy. Their environment is often marred with bureaucracies, corruption and insecurity. The aforementioned discourages investments from both local and foreign investors. Direct foreign investments play a cardinal role in improving the economic state of a country. Foreign capital injection brings with them additional benefits apart from the development of business units. Some of the benefits accrued through foreign investments include, infrastructural development and employment creation. The citizens of authoritarian regimes often live in abject poverty; this is relatively because they are unable to afford basic necessities. To break the vicious cycles of poverty, third world economies need to embrace foreign investors and authoritarian rulers are a drag. For example, Robert Mugabe who is a renowned Africa leader has succeeded in scaring away investors through his antics as an authoritarian ruler. His citizens are exposed to myriad problems as the cost of living is escalating (Umpleby, Medvedeva, & Oyler, 2004).

            Western economies have over the years imposed economic sanctions on these regimes. This has made investment climate more hostile. Other emerging economies i.e. Iran have stagnated courtesy of United States of America sanctions. From the above, it is apparent that the development of an economy relies largely on the levels of investments both by local and foreign investors (Orenstein, 2009).

            Authoritarian governments are responsible for the dwindling performance of their economies. Often, the primary role of a government is to formulate and implement policies that are in the interest of the public. However, that is never the case with authoritarian governments. This is because it’s if often driven by the interests of a few persons who seek to benefit at the expense of the larger folk. Trade and development of both emerging and developing economies have been hampered by the failure of authoritarian regimes to adopt liberal policies that could ease the exchange of goods and services between borders. These regimes have also gagged innovations by making the transfer of information from one country impossible through the adoption of rigid policies (Spechler, 2009).