Why Elections Matter for the Economy

Elections are often viewed as strictly political events, however, in reality they also send legal and economic signals. They show citizens, investors and international partners whether a country is governed by predictable rules or by instability. According to International law, the legitimacy of the political authority derives from the freely expressed will of the people.

Bangladesh, a signatory to the International Covenant on Civil and Political Rights (ICCPR), is legally obligated to conduct “genuine periodic elections” that enable citizens to select their representatives without interference, as stipulated in Article 25. This is not mere rhetoric. These are binding legal commitments.

This discussion is meant to highlight principles of credible elections and institutional trust, not to comment on any specific political party or past government. When electoral standards weaken, the effects transcend far beyond government halls.

In Zimbabwe, the disputed elections in 2008 caused sanctions, capital flight and enduring economic damage. Similarly, Belarus in 2020 saw a loss of electoral credibility which caused investors to withdraw and triggered financial isolation. In Myanmar, the breakdown of electoral legitimacy following the 2021 political crisis led to international sanctions, economic contraction, and the withdrawal of foreign investment.

There was a major political crackdown in Cambodia, where the suppression of genuine political competition was subsequently considered a violation of Article 25 of the ICCPR by the UN Human Rights Committee. These cases show that the legitimacy of elections and economic stability are inseparable.

This is not mere speculation as empirical evidence confirms that declining electoral standards have real economic consequences, including reduced foreign investment, and greater political instability.

A recent assessment by V-Dem and the World Bank’s Worldwide Governance Indicators analysis finds that “electoral autocracies” are far more likely to face sanctions, capital flight, and waning confidence of investors than fully functioning electoral democracies. These are quantifiable consequences as opposed to moral assessments.

Elections are not just political rituals for investors and development partners, but they serve as a test of institutional reliability for them. When governments cannot be replaced at the ballot box, legal and policy uncertainty increases, contracts lose credibility, and economic planning becomes uncertain. That is why credible elections are a development issue, not merely a moral or political one.

A single political party cannot guarantee a credible election by itself because it depends on the Election Commission, the civil service, law-enforcement bodies, the judiciary, and the media acting impartially to protect the constitutional order. Together, they ensure that voters can participate without fear, that competition is real, and that the results are credible.

An independent judiciary plays a crucial role in election credibility. When electoral disputes arise, they must be resolved through law rather than political power. Investors do not care who wins, rather they are concerned whether the process is credible. Therefore, in countries such as the United Kingdom and the United States, credibility of elections does not depend on the outcome, but rather on strong institutions, independent election bodies, transparent counting, judicial review, and open media scrutiny which are consistently associated with safer investment climates.

Bangladesh has tremendous potential to grow both economically and institutionally but the growth depends on the trust that people and investors place in its institutions, and that trust is nurtured through elections that are fair, transparent, and conducted with integrity.

Elections are the ultimate test of that fairness. Because economies do not collapse only from poor policy. They collapse when legitimacy disappears.

A Hopeful Future For Bangladesh

Amid ongoing challenges and difficulties, Bangladesh has a real opportunity to strengthen democratic institutions, uphold the rule of law, and lay the foundation for growth and inclusive development that benefits everyone. As history shows, nations which invest in institutional legitimacy during challenging times often emerge stronger, more stable, and better equipped for sustained development.

Credible elections are the backbone of this democratic renewal because they rebuild trust between citizens and the state. When people believe their voices actually matter, they take part in politics more actively, tensions in society ease and public institutions become more accountable.

This trust also shapes international perceptions, as foreign investors, development partners, and global institutions evaluate not only economic data but also the strength and reliability of legal and political frameworks before making long-term commitments.

Bangladesh already has several critical building blocks for national development including a vibrant civil society, a growing private sector, a skilled bureaucracy, and a judiciary with the potential to safeguard the constitution. By actively strengthening coordination among these institutions, most importantly, the Election Commission, courts, law enforcement agencies, and the media, the country can ensure electoral processes transparent, inclusive, and credible.

It is crucial to note that credible elections do not automatically lead to economic success. However, they lay the groundwork on which effective policies, confidence of investors, and social stability can be built and sustained.

We have seen that countries which prioritize the protection of electoral integrity often benefit from steady policies, reliable enforcement of contracts, and predictable regulations which are key factors to support long-term economic growth.

Similarly, when Bangladesh consistently demonstrates transparent governance, strong independent institutions, and respect for fundamental rights, it can strengthen confidence at home and abroad. This is not a matter of party politics or ideology but rather about the broader national interest.

In the end, a future built on credible elections and trusted institutions offers Bangladesh the strongest foundation for prosperity, long-term stability, and inclusive development for all its citizens.

Mahir Tajwar Khan Herok is a Barrister-at-Law at The Honourable Society of Lincoln’s Inn.