Honesty is important because it creates peace of mind and promotes relationships of trust. The benefits of honesty extend to personal health, relationships and society at large. The opposite, lying, leads to distrust, conflict, corruption and anxiety.
Psychology Today reports that people describe conversations in which they lie as less intimate and pleasant than truthful exchanges. Whereas lying creates an internal mental conflict between what one knows to be true and what one says, honesty promotes feelings of tranquility. Thus, honesty results in relationships that are more fulfilling.
Honesty also makes relationships stronger by promoting trust. If someone discovers that he has been lied to, he is more likely to doubt the liar's words in the future. This not only limits the possibility of favorable treatment for the one who lies, but reduces the opportunity for cooperation between the two parties. This is what makes honesty a form of social capital, according to the International Monetary Fund. Societies characterized by a culture of dishonesty are missing a key ingredient for thriving business, government and other institutions. Dishonest political leaders, for example, take advantage of their office in a variety of ways, such as stealing public funds and subverting due process.
Honesty also enables self-improvement. A person who is honest with himself recognizes his weaknesses and is thus able to work toward becoming better. Someone who is dishonest with himself denies his flaws and never improves.