Influence of Political Stability on Productivity

The concept of productivity is critical in understanding economic growth and development. Productivity is often measured as output per worker or output per hour worked. Advanced economies typically have higher productivity levels, contributing to more significant economic growth. However, several factors can influence productivity, such as technology, capital investments, labor quality, and institutional frameworks.

Consider a country that has invested heavily in both physical and human capital over the past decade. However, it has simultaneously experienced political instability, which has led to ineffective governance and reduced institutional quality. Given this scenario, which factor is most likely to hinder productivity despite these investments?