Power Concentration and Economic Growth

• In Event: Regime Type

Abstract

The political sciences have long been invested in answering the question of whether governments that concentrate power in the top leadership are more or less able and willing to promote economic growth. Whereas a more institutionalist scholarship has argued that high levels of power concentration reduce leaders’ accountability and thereby the prospects for development, a more historical-structuralist strand in the literature has found them to be the basis for the greatest developmental success stories in the post-colonial world. So far, however, a lack of adequate data has made it difficult to test the validity of contending frameworks and hypotheses across time and space. We aim to fill this gap using the novel Political Settlement (PolSett) dataset’s Power Concentration Index (PCI). Covering 42 countries in the Global South from 1946 or independence to 2018, the PCI captures the degree to which power in a country is concentrated both in the governing coalition vis-à-vis the opposition (termed horizontal power); and within the governing coalition, that is, in the leader’s faction vis a vis other factions (termed vertical power). Using two-way fixed-effects regressions and holding regime type and other relevant potential confounders constant, we find robust evidence that higher levels of power concentration in a country’s top leadership are associated with faster economic growth.

Author

• Nicolai Schulz, Humboldt-Universität zu Berlin