The champions of capitalism? National leaders and the institutional channel

ABSTRACT

Economic growth can be attributed to national leaders in only a limited set of cases. We compare two sets of leaders identified in the literature – those whose growth rates are statistically greater than zero and those whose growth rates are found to be statistically less than zero. We find that leaders who performed better in terms of economic growth presided over a change in economic freedom of roughly a half of a point more than those who performed poorly, suggesting the difference in economic performance may in part have been through the institutional channel. The effect is large, with many specifications corresponding to more than a half of a standard deviation across countries today.

KEYWORDS:

• Autocracy
• economic freedom
• leaders
• ideology
• institutions

JEL CLASSIFICATION:

• O43
• N40

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The EFW series is available at five-year intervals. The annual series is constructed using linear interpolation.