Culturally Preferred Leadership Styles, Government Budget Transparency, and the Perceived Rule of Law: An International Analysis

Abstract

Evidence provided by the GLOBE study (2004) has shown that different cultures have definite preferences for different leadership styles. This study examines whether the cultural preference for specific leadership styles has implications for the development of the rule of law and for transparency in government budgetary reporting. Our results show that, while the Performance-Oriented leadership style is positively related to the rule of law, the Self/Group-Protective was positively associated with greater budget transparency. No consistent relationships were found for the Team-Oriented and Participative leadership styles. The most surprising and unexpected findings were that Autonomous leadership had a negative relationship with economic development (measured by GNP per capita), while Humane leadership had a strong positive relationship. One major implication of this study is that the movement towards both greater rule of law and greater transparency in government budgeting may be facilitated by changes in cultural preferences for certain leadership styles.

Keywords: Budget transparency, Leadership styles, GLOBE leadership styles, Lewin leadership styles

JEL Classification: L38, H61