-Anthony J. Evans is assistant professor at ESCP Europe Business School. The opinions expressed are his own. Join Reuters for a live discussion with guests as Chancellor George Osborne makes  an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-

Think back to the immediate aftermath of the general election. Throughout the hung parliament epoch the term “uncertainty” was being used lavishly.

And often as if it’s a bad thing – indeed the Conservative election campaign suggested that a strong and stable government was important. Now that the coalition appears to be providing that, is it?

It is not obvious that a decisive government is always best. Indeed for most voters it depends on the policies that such power is generating. For Tories, a strong Tory government is the best-case scenario.

For Labour, it’s worst case. There’s something to be said for the balance that comes from the middle ground. You don’t have to be a rabid libertarian to appreciate that much human suffering has stemmed from unchecked political power.

Indeed constitutions tend to be designed to reduce the ability of any single party from unleashing the full force of what they think is best.

- Anthony J. Evans is assistant professor at ESCP Europe Business School. He will participate in a Reuters Budget live blog at noon GMT on Wednesday, March 24, 2010. Please tune in and join the discussion.-

We’re used to hearing how credit markets “froze” in the summer of 2008, and how the subsequent policy responses have been aimed at economic recovery. Indeed politicians often use terms such as “stimulate” or “kick start” to give the impression that intervention is a necessary prelude to growth.

An alternative view is that fiscal spending has sought to freeze economic activity, by preserving jobs and preventing the structural adjustments that have to take place.

What the economy needs is a widespread recalculation, where unprofitable businesses relinquish their scarce resources, and investors get back to investing. Evidence from the Great Depression in the 1930s shows that vast and arbitrary policy changes backfired, because they destabilised the investment climate.

It was only when government gave up that confidence returned. We now need to see a similar realisation that an economy’s strength rests on private investment, and that policy changes create regime uncertainty.

It is unlikely that an unpopular incumbent government would take the short-term pain that is necessary just before an election. However there are several reasons why the costs of recalculation are exaggerated. Recessions do not affect the economy uniformly, and the disruption they cause present massive opportunities for well-run businesses.

We are seeing high profits for companies that can navigate these difficult waters, with great rewards for acquisitions and foreign expansion. It is also possible for a majority of consumers to leave a recession with higher incomes than before it, challenging the notion that times are necessarily gloomy.