Most developing countries are going through a perpetual debt trap which takes away resources that could have been used on development, but instead are used to service compounded debt.
Negative Effects of Interest Based Loans on Development
Political Economy from Islamic Standpoint
In a capitalistic democracy, the elite class is able to expend on political campaigns and hence take part in politics and where crony capitalism results in business and political class combining to pursue their self interest.
Islamic Economics Project 