Bad For Business: Dictators Rarely Associated With Strong Economies, Study Finds

MELBOURNE, Australia — A number of images and attributes likely come to mind when one imagines a dictator-led nation, but a thriving economy probably isn’t one of them. Still, many autocratic rulers, such as the late Lee Kuan-Yew of Singapore, are credited by their own people for their country’s prosperity. Now, a new study analyzing dictators over the past 150 years finds they are rarely associated with strong economies. In fact, autocratic rulers are much more often linked to poor and struggling economies.

Researchers from RMIT University and Victoria University in Melbourne, Australia, performed a robust analysis on economic growth and political leaders / regimes between 1858-2010. They discovered that strongman leaders wielding absolute power seldom result in economic prosperity.

“In an era where voters are willingly trading their political freedoms in exchange for promises of strong economic performance to strongman figures like Donald Trump, Vladimir Putin or Recep Tayyip Erdogan, it’s important to understand whether autocratic leaders do deliver economic growth,” comments Dr. Ahmed Skali, RMIT University economist, in a release. “Our empirical results show no evidence that autocratic leaders are successful at delivering economic growth in any systematic way.”

Countries under autocratic rule experienced economic growth very rarely, so much so that researchers say growth occurred about as frequently as one would predict based solely on chance. On the other hand, dictators ruling over countries with struggling economies were discovered so often that there is no way it could simply be explained away by chance, according to researchers.

“Taken together, these two results cast serious doubt on the view that autocratic leaders are successful at promoting economic growth,” Skali says.

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The study’s authors also examined other factors besides economic growth.

“We also examined whether autocratic leaders were good at implementing measures which mainly benefit the less well-off in society, such as reducing unemployment or spending more on health and education. That was not the case,” Skali continues. “We also looked further into whether growth-positive autocrats, although infrequent, really do deserve the credit for turning around their country’s economic fate.”

Researchers found absolutely no evidence that dictators have any type of positive impact on their nation’s economic growth trajectories within five to 10 years after assuming power. With this in mind, Skali says that the dictators that are lucky enough to rule over economically successful countries are simply “riding the wave” of pre-existing growth. Similarly, the research team investigated if dictators who presided over especially poor countries just came to power at an inopportune time, but they discovered that economic growth dropped significantly only after these rulers came to power.

All in all, these findings point to the simple conclusion that dictators have little to no positive benefit on economies, but can do a whole lot of harm.

Why, then, do the citizens of dictator-led nations so often praise their leaders when economic times are good? Researchers say that humans are naturally inclined to jump to conclusions about certain phenomena.

“In the wild, this is a successful evolutionary strategy, even if it leads to false positives,” explains co-author and economist Stephanie Rizio. “It is better to interpret rustling in a nearby bush as caused by a predator or an ill-intended rival tribesperson, and be incorrect, than to ascribe it to the wind and be incorrect. This tendency has remained with us into the present day.”

In other words, it makes sense on a purely instinctual level to attribute positive developments in an autocratic nation to its leader. It doesn’t matter if the dictator is really worthy of the praise or not, it is in the best interest of the people to sing his (or her) praises.

Furthermore, people are also inclined to accept the rule of an absolute ruler, or alpha.

“Perhaps this is why we routinely attribute group-level outcomes to the actions of leaders, even when leaders have no control over outcomes, which may lead us to be accepting of autocratic leadership styles,” Rizio says.

Historically, during tough or uncertain times people naturally become more willing to accept a strong hierarchical system and absolute leader, especially if it means guaranteed safety and comfort. The research team say their findings are helpful regarding economic development and political leadership theory, but also serve as a timely reminder of the dangers of absolute political power, especially once one considers the fact that “strongman” leaders have become more and more prevalent over the past few years.

The study is published in the journal Leadership Quarterly.

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