The Leader as Catalyst - On Leadership and the Mechanics of Institutional Change

48 Pages Posted: 7 Jul 2008

See all articles by Sumon Majumdar

Sumon Majumdar

Queen's University - Department of Economics

Sharun Mukand

Tufts University - Department of Economics

Date Written: June 2008

Abstract

Individual leaders have been central to the transformation of political institutions, organizations and many instances of social and economic reform. Why are some leaders able to take advantage of opportunities to successfully catalyze large-scale change while others fail? In this paper we argue that the key to understanding a leader's effectiveness lies in dissecting the symbiotic nature of the leader-follower relationship. While the expected dynamism of a leader attracts followers, at the same time, followers empower the leader and contribute to his dynamism. This two-way leader-follower interaction can endogenously give rise to threshold effects: 'small' differences in leader ability can have a large impact on the degree of effective leadership and dramatically alter the prospects for change. The framework also naturally allows us to explore when individuals may deliberately prefer to follow an ambitious leader with very different preferences rather than a leader with more congruent preferences. Moreover, by empowering the self-interested ambitious leader, such followership may make him a more effective agent of (both good and bad) change.

JEL Classification: D72

Suggested Citation

Majumdar, Sumon and Mukand, Sharun, The Leader as Catalyst - On Leadership and the Mechanics of Institutional Change (June 2008). CESifo Working Paper Series No. 2337, Available at SSRN: https://ssrn.com/abstract=1156276 or http://dx.doi.org/10.2139/ssrn.1156276

Sumon Majumdar

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada

Sharun Mukand (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States
617-627-5476 (Phone)
617-627-3917 (Fax)

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