 Leaders and institutions as joint determinants of economic growthEuropean Journal of Political Economy, 2025, vol. 89, issue C Abstract: In this paper, I argue that national leaders and institutions jointly determine cross-country income differences. I document two novel cross-country stylized facts: (1) national leaders in democracies have more pre-tenure work experience, a novel measure of leaders’ capabilities, than those in non-democracies, and (2) leaders with more diverse work experience lead to better economic performance in democracies and to higher regime stability in non-democracies. I establish robustness by several instrumental variable approaches, a regression discontinuity design based on close elections, and (quasi-)random leadership transitions. I build an endogenous growth model with political selection and institutional transitions to rationalize these facts. Quantitative exercises based on this model suggest that the differences in the channel of political selection and in the role of leaders can explain the persistent income gap between democracies and non-democracies. Keywords: Leader; Institution; Economic growth; Social stability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:89:y:2025:i:c:s0176268025000862 DOI: 10.1016/j.ejpoleco.2025.102726 Access Statistics for this article European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung More articles in European Journal of Political Economy from Elsevier |
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