Leader Turnover, Regime Type, and Growth Volatility

Abstract

How do leaders influence national-level economic outcomes? We address this question by considering how leadership turnover influences volatility in economic growth. In doing so, we theorize that leaders from mixed regimes will reduce economic volatility due to domestic political incentives to create stable economic outcomes. Furthermore, we decompose the influence of leaders in non-democratic regimes and argue that leaders in party-based authoritarian regimes will also reduce economic volatility. To test our hypotheses, we focus on the effect of leadership turnover due to natural leader death to control for issues of endogeneity. We find that leaders in mixed regimes reduce volatility more than leaders in autocratic and democratic regimes and that leaders in party-based authoritarian regimes reduce volatility more than those in military or monarchy-based regimes. We conclude by explaining the implications of our findings for the study of leaders in international politics and their impact on economic growth and development.