Political instability affects economic policy by creating uncertainty that can deter investment and disrupt markets. When governments face conflict, corruption, or inefficiency, the overall economic environment becomes unpredictable, hindering growth. This instability often leads to abrupt policy shifts or ineffective governance, as leaders struggle to maintain control. Furthermore, in times of crisis, governments may prioritize short-term relief over long-term development strategies, potentially exacerbating existing economic challenges and hampering sustainable progress.