Political instability leads to instability in public decisions and policies, because a new chief minister (CM) usually changes ministers and officials. Unpredictable governance does not provide business or any economic activity the environment it needs to grow, reduces the flow of resources, and affects economic performance and social progress.
From the early 1980s, political instability was evident in the northern states of Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh (BIMARU). On average, CMs in northern India during the 1960s governed longer (1268 days) than CMs in the South (831 days). But, by 2000-01, a reversal had taken place: CMs in BIMARU states governed for only 663 days whereas CMs in southern states (Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala) governed for 914 days.
The book The Paradox of India’s North-South Divide: Lessons from the States and Regions provides a personal account of T S R Subramaniam (Chief Secretary, Uttar Pradesh: ‘ … In the 1990s in UP, the average tenure of a collector in a district was nine months … all over India it was thirteen months. How can one expect meaningful results? … In the current state of affairs, few officers have thought of contributing anything. An officer merely wishes to extract as much as he can for himself and his family in every successive assignment…”
Government formation affects governance quality indirectly, through political stability. Tamil Nadu was governed mostly by political parties that won elections by a majority, while Uttar Pradesh (UP) had seen major fallouts of coalition governments. Majority rule leads to swift decision making and policy implementation. Also, in UP, the population is represented by various political parties that are strongly divided on the basis of caste and other socio-cultural factors. Paradoxically, these political parties had come to power but failed to empower the lower strata of population that they represent. The fight for power between the political parties in UP had led to incidents of social unrest, the most infamous being the Babri Masjid case.
Therefore, we can see that policy making, programme implementation, and governance quality suffers from political instability.