Do Leaders Matter? National Leadership and Growth Since World War Ii

57 Pages Posted: 13 Apr 2004

See all articles by Benjamin F. Jones

Benjamin F. Jones

Northwestern University; National Bureau of Economic Research (NBER)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Date Written: March 2004

Abstract

Economic growth within countries varies sharply across decades. This paper examines one explanation for these sustained shifts in growth - changes in the national leader. We use deaths of leaders while in office as a source of exogenous variation in leadership, and ask whether these randomly-timed leadership transitions are associated with shifts in country growth rates. We find robust evidence that leaders matter, particularly in autocratic settings. Moreover, the death of autocrats appears to lead towards improvements in growth. We investigate the mechanisms through which leaders affect growth and find that autocrats affect growth directly, through fiscal and monetary policy. Autocrats also influence political institutions that, in turn, appear to affect growth. In particular, we find that small movements toward democracy following the death of an autocrat appear to improve growth, while dramatic democratizations are associated with reductions in growth. The results suggest that individual leaders can play crucial roles in shaping the growth of nations.

Keywords: leaders, leadership, growth

JEL Classification: N10, O11, O57

Suggested Citation

Jones, Benjamin F. and Olken, Benjamin A., Do Leaders Matter? National Leadership and Growth Since World War Ii (March 2004). Available at SSRN: https://ssrn.com/abstract=524042 or http://dx.doi.org/10.2139/ssrn.524042

Benjamin F. Jones

Northwestern University ( email )

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Benjamin A. Olken (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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617-588-1407 (Phone)

Harvard University - Society of Fellows

Cambridge, MA 02138
United States

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