Executive Constraints and Economic Growth in Autocracies

In the work I address the question of how the degree of power that a dictator has impact economic performance using within and moment-based estimators. Political regime impose boundaries on the leader, however, may be violated if the leader has enough power. Personalism denoting the degree of leaders’ personal power and his ability to influence decision-making process without constraints is important for policy outcomes. Focusing on the observable indicators of personalism I distinguish power concentration, executive constraints, and leader-elite interactions as the factors that reflect personalisation of power in a regime along with institutions that to a certain degree impose boundaries on the leader, however, may be violated if the leader has enough power. I find that higher personalisation of power has negative impact on economic performance. Countries where dictators stay longer in power and have opportunity to purge the elites in general perform worse economically. The work shows only the general tendency that countries where a leader has a lot of power perform worse compared to those where the leader cannot make decisions on his own without the probability of being removed if the decisions harm the elite’s interest. Leaders may have different incentives that explain their behaviour, but still more power in hands of one man, the greater is the probability for the country to be economically unsuccessful.