This paper examines the impact of political instability on economic growth using a dataset of 169 countries from 1960 to 2004. The study finds that higher political instability is associated with lower GDP per capita growth. Political instability negatively affects growth by reducing productivity growth and, to a lesser extent, physical and human capital accumulation. Economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect. The study uses a system-GMM estimator to analyze the effects of political instability on economic growth. The results show that an additional cabinet change reduces annual real GDP per capita growth by 2.39 percentage points, primarily due to the negative effects on total factor productivity growth. Political instability also affects growth through physical and human capital accumulation, with the former having a slightly larger effect than the latter. The paper also explores the channels through which political instability affects economic growth. It finds that political instability adversely affects productivity growth and human capital accumulation. The results indicate that total factor productivity growth is the main channel through which political instability affects economic growth, accounting for 52.13 percent to 58.40 percent of the total effects. Physical capital accumulation accounts for 22.59 percent to 28.71 percent of the total effect, while human capital growth accounts for 17.08 percent to 21.11 percent. The study concludes that political instability is harmful to economic growth through its adverse effects on total factor productivity growth and, to a lesser extent, by discouraging physical and human capital accumulation. Governments in politically fragmented countries with high degrees of political instability need to address its root causes and try to mitigate its effects on the design and implementation of economic policies. Only then can countries have durable economic policies that may engender higher economic growth.This paper examines the impact of political instability on economic growth using a dataset of 169 countries from 1960 to 2004. The study finds that higher political instability is associated with lower GDP per capita growth. Political instability negatively affects growth by reducing productivity growth and, to a lesser extent, physical and human capital accumulation. Economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect. The study uses a system-GMM estimator to analyze the effects of political instability on economic growth. The results show that an additional cabinet change reduces annual real GDP per capita growth by 2.39 percentage points, primarily due to the negative effects on total factor productivity growth. Political instability also affects growth through physical and human capital accumulation, with the former having a slightly larger effect than the latter. The paper also explores the channels through which political instability affects economic growth. It finds that political instability adversely affects productivity growth and human capital accumulation. The results indicate that total factor productivity growth is the main channel through which political instability affects economic growth, accounting for 52.13 percent to 58.40 percent of the total effects. Physical capital accumulation accounts for 22.59 percent to 28.71 percent of the total effect, while human capital growth accounts for 17.08 percent to 21.11 percent. The study concludes that political instability is harmful to economic growth through its adverse effects on total factor productivity growth and, to a lesser extent, by discouraging physical and human capital accumulation. Governments in politically fragmented countries with high degrees of political instability need to address its root causes and try to mitigate its effects on the design and implementation of economic policies. Only then can countries have durable economic policies that may engender higher economic growth.