Working Paper: CEPR ID: DP8962
Authors: Jason Papaioannou; Jan Luiten van Zanden
Abstract: This paper contributes to the growing literature on the links between political regimes and economic development by studying the effects of years in office on economic development. The hypothesis is that dictators who stay in office for a long time period will become increasingly corrupt, and that their poor governance will impact on economic growth (which is reduced), inflation (which increases) and the quality of institutions (which deteriorates). This may be related to the fact that their time horizon is shrinking: they develop (in the terminology developed by Olson) from ?stationary bandits? into ?roving bandits?. Or they may get caught into a ?disinformation trap?, caused by the ?dictator dilemma?. We test these hypotheses and indeed find strong evidence for the existence of a dictator effect: the length of the rule is negatively related to economic growth and the quality of democratic institutions, and positively related to inflation. This effect is particularly strong in young states and in ?single-party? regimes. The negative effect of years in office was almost constant in time and did not disappear after about 1992.
Keywords: Africa; Dictatorships; Economic Growth; Political Institutions
JEL Codes: H7; O2; O55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| longer years in office (J26) | lower economic growth (F62) |
| longer years in office (J26) | higher inflation (E31) |
| longer years in office (J26) | deteriorating institutional quality (O17) |
| longer years in office (in young states) (J26) | poorer economic outcomes (F63) |
| type of regimes (single-party, military, monarchic) interacts with years in office (P16) | negative effects on economic growth (F62) |