Expropriation risk can harm a country's economy by discouraging businesses from investing in capital. When the government is more impatient than firms, it can lead to lower levels of capital and productivity in the long run. This means that even when the economy reaches a stable point, it may not be as efficient as it could be. The threat of expropriation can also cause resources to be misallocated, with more productive firms suffering the most. This can result in overall losses in output and productivity for the entire economy.