Among the factors most likely to affect long-term economic growth are societal stability and the integrity of legal systems. Stewardship of natural resources is also a key element in issues that affect a nation’s prosperity. Policies that guard the integrity of the child-rearing process and protect familial inheritances are two other factors that facilitate economic growth over the long term.
Societal stability usually depends upon how well societal institutions provide a stable climate for ongoing, long-term investments, so that these may be undertaken with confidence by investors. These institutions can be found in many areas of society focused on providing safety and a better quality of life, including education, defense, health care and research. One of the main ways in which a government facilitates long-term economic growth is by creating and interpreting laws in ways that create a growth-friendly economic climate.
A nation’s investment in educational institutions, whether that investment is private or public, is often another major factor in ensuring long-term economic viability. Frequently, a combination of incentives and penalties are used by a nation’s government to increase literacy and job skills. Penalties designed to increase economic growth over the long term include compulsory education laws, and laws that punish those who exploit child workers.
How well a nation defends itself is another factor in increasing economic growth over the long-term. If a country is unable to repell invaders, restrict looting, or prevent widespread organized crime, there may be devastating repercussions to the economy. Measures undertaken to ensure adequate national defense are usually deemed critical to ensuring prosperity.
Another way in which a nation’s legal system may impact long-term economic growth lies in how well it ensures the integrity of capital ownership. Many nations have laws that exist to ensure capital markets operate lawfully and consistently. In nations where this is not the case, investors may flee to unregulated black markets, and legitimate markets may languish.
Investment in technology is generally considered another key ingredient for facilitating long-term economic growth. Often governments offer incentives to encourage this activity. Government-sponsored technological assistance is a frequent means to increase long-term economic prosperity and may include subsidies to encourage technological development.
Protection of natural resources against unfair exploitation or ruination from pollution is yet another factor in raising societal prosperity. Improper stewardship is usually thought to be a key ingredient necessary to increasing the standard of living. As competition for natural sources like fresh water, productive farmland, or ocean fisheries intensifies in a geographical area, ensuring ongoing viability of these resources is considered by most to be of critical importance for long-term economic growth.