The power of leaders, the strength of institutions
The power of political leaders and the importance of institutions in the economic development of countries
7' min read
7' min read
What is the impact of rulers on the destinies of their countries? How much can a single individual, a head of state, influence the fate of a nation? Especially since politics has become a matter of personalities rather than ideologies, and strong leaders such as Trump, Putin, Erdoğan, Xi Jinping, Meloni herself, have stolen the thunder from the party apparatus, this question takes on crucial importance for understanding the dynamics of power and contemporary politics. A question to which, of course, it is very complicated to find an unambiguous answer. For some time now, scholars such as Nobel Prize winners Daron Acemoglu, Simon Johnson and James Robinson have been trying to answer it. They argue that, in the long run, it is institutions and not individual leaders that are the primary engine of development. According to their perspective, the fate of nations depends not so much on the individual qualities of the ruling class, but on 'inclusive institutions', i.e. those capable of ensuring participation, property rights, the right incentives and lasting political stability. Others, however, such as Benjamin Jones and Benjamin Olken have shown that the sudden death of a head of state can have measurable effects on economic growth, argue for the pre-eminent role of the leader. However, from a methodological point of view, the results of this research are negatively influenced by the difficulty of identifying the causal effect. Indeed, leaders are chosen, or self-imposed, and these processes of self-selection, as statisticians explain, make it difficult to distinguish the effect of individual characteristics from that of the environment in which leaders operate. Put another way, it is impossible to tell whether the best leaders, with their policies, have been able to bring about phases of expansion or, simply, in favourable phases of the economic cycle, better leaders are more likely to be selected.
A recent study just published in Econometrica addresses and attempts to solve this problem through a novel technique. In their paper "History's Masters. The Effect of European Monarchs on State Performance', Sebastian Ottinger and Nico Voigtländer focus on the issue of the personalisation of political power. To begin with, they distinguish between strongly institution-bound systems, in which leaders have little room for manoeuvre, and leaderist systems, in which the collective destiny depends to a large extent on the leader's abilities, or incapabilities. Their 'laboratory' consists of 339 kingdoms that flourished between the 10th and 18th centuries in 13 European states. A laboratory crowded with dynasties, monarchs, wars of expansion and colonisation, epidemics and revolutions.
The inbreedingas a natural experiment
The methodological innovation that allows Ottinger and Voigtländer to brilliantly address the problem of causality is to use dynastic inbreeding, consanguinity, as a variable to exogenously identify the ability of kings.
As inbreeding was common practice in European dynasties, it is possible to calculate a coefficient of consanguinity (inbreeding) for each monarch. Higher values indicate a high level of endogamy, i.e. a higher number of consanguineous ancestors from intermarriages between related individuals. And it is known that the higher the level of endogamy, the greater the likelihood of cognitive and physical deficits, and thus a reduced ability to lead. In this way, the family tree becomes a tool that allows us to identify the causal effect. The leader's ability is no longer attributable to the historical context alone, but derives, in a quantifiable manner, from genetic factors independent of the institutional context.
