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The Financial and Economic Dangers of Democratic Backsliding
This report presents robust global data showing that political polarization—especially in advanced economies—is increasingly tied to higher costs of capital and greater economic volatility. It finds that more polarized environments tend to experience elevated equity risk premiums and reduced investment, posing long-term financial risks. The authors urge businesses and investors to prepare by factoring polarization into their strategic planning and recognizing it as a material driver of market performance not just a political issue.