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While I would argue that monarchies can be a good form of government, it does all depend on the type of monarchy and the monarch. The following couple arguments are written with the idea that the monarch is 'good'.
As has been said preivously, a monarch can give a strong leader that everyone looks to. The best example of this can be seen in Spain with King Juan Carlos I who, upon the death of the fascist dictator General Franco in 1975, ushered in a new era of democracy and prosperity. As such he is a unifiying force in a country where regional identities have and continue to threaten to pull the country apart, most notably in Cataluna and the Basque region.
The most effective type of monarchy, I would argue is that of a consitutional monarchy, for example Britain. While the Queen does hold executive power, it is the Prime Minister that takes decisions as it is the Prime Minister that represents the people. You could then argue, why have the Queen if she has no power why have her at all? To this I would say that she provides an effective control or limit to the aspirations of any one person, protecting the people from the power hungry as they cannot hold ultimate power.
Of course, not all monarchs are 'good', there are a multitude of people to choose from if we wanted an example of someone 'bad'. However, in modern society monarchs will understand that unless they serve the people, they will be deposed by a republic or someone else installed in their place.
There is of course another type of monarch, that of absolute monarchy. This, I an not in favour of and it is here that I agree that power corrupts. The worst example of this is the current King of Swaziland, who is said to be very wealthy while his people starve and suffer from HIV/AIDS.
Yes, power does corrupt. It corrupts everyone, kings, queens and presidents. Constitutional monarchies can put a limit on the power that any one person holds.
I am probably a good person but I haven't taken the time to fill out my profile, so you'll never know!