This paper examines the impact of crises on long-term economic growth, focusing on the role of political institutions. The authors use a dynamic panel growth regression model to analyze the interaction between crises and various political variables, including democracy, political competition, and external constraints on government. The results suggest that only countries with strong democracies, high levels of political competition, and external constraints on government can potentially benefit from crises and use them as opportunities to enhance long-term output per capita and productivity growth. The study finds that crises generally have a negative impact on long-term growth, but this effect is mitigated by the quality of political institutions. Strong democracies can neutralize the negative effects of crises, while autocratic governments typically amplify them. The paper also decomposes the Polity index into sub-indices for democracy, autocracy, external constraints, and political competition, showing that each component works in opposite directions in terms of its interaction with crises. The findings have implications for policy, suggesting that countries with solid democratic institutions may welcome crises as opportunities to enhance growth, while those with weak political institutions should avoid them.This paper examines the impact of crises on long-term economic growth, focusing on the role of political institutions. The authors use a dynamic panel growth regression model to analyze the interaction between crises and various political variables, including democracy, political competition, and external constraints on government. The results suggest that only countries with strong democracies, high levels of political competition, and external constraints on government can potentially benefit from crises and use them as opportunities to enhance long-term output per capita and productivity growth. The study finds that crises generally have a negative impact on long-term growth, but this effect is mitigated by the quality of political institutions. Strong democracies can neutralize the negative effects of crises, while autocratic governments typically amplify them. The paper also decomposes the Polity index into sub-indices for democracy, autocracy, external constraints, and political competition, showing that each component works in opposite directions in terms of its interaction with crises. The findings have implications for policy, suggesting that countries with solid democratic institutions may welcome crises as opportunities to enhance growth, while those with weak political institutions should avoid them.