Take the money and run: Political turnover, rent-seeking and economic growth

Tony Caporale () and Jonathan Leirer

Journal of Economic Behavior & Organization, 2010, vol. 76, issue 2, 406-412

Abstract: We find a negative and significant relationship between gubernatorial turnover and U.S. state economic growth. Although our finding of an inverse relationship between growth and political instability may seem to contradict Olson's (1982a) famous hypothesis regarding the growth retarding nature of political stability, such constitutional political changes were not primarily what Olson had in mind. We argue that enhanced political turnover is associated with more rent-seeking since payoffs to focusing on special interest (redistributive) policies vs. general (growth enhancing) ones are greater for less durable regimes. Therefore, we interpret our evidence as supportive of Olson's broader argument concerning the negative affect of rent-seeking behavior on growth.

Keywords: Political; instability; Economic; growth (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:76:y:2010:i:2:p:406-412

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