Regime types, structural factors, and economic performance.

Abstract

This project discusses the joint impacts of structural factors and political regimes on rulers' policy choices and economic performance. The first main question asks why some autocrats tend to pursue growth-enhancing policies whiles others choose growth-retarding policies. If political regimes fail to explain the variations in economic performance in authoritarian regimes, then what are some of the potential factors that account for the divergence? I argue that structural factors play a critical role in shaping rulers' incentives and inducing them to follow divergent policies. Several structural factors determine the payoffs of different policies and induce rulers to choose specific policies. I find that autocrats prefer to adopt growth-enhancing strategies when they face intense external challenges, low natural-resource endowment, low levels of ethnic heterogeneity, social wealth inequality, and when they expect longer political tenure. Although those structural factors are not formal institutional constraints, they constitute the de facto constraints that shape rulers' incentives. Given structural conditions of this sort, the self-interests of rulers become aligned with the broader national interests. Thus, this project asks whether the effects of regime types on economic performance vary conditionally upon such different structural factors? Conversely, I ask whether the impacts of the structural factors on economic performance are different under democratic and authoritarian regimes? I find that when structural factor conditions are not conductive to development, democracies tend to do better than autocracies. The reason is that democracies in such cases provide institutional checks and motivations for rulers to provide public goods, whereas autocrats in such cases face neither democratic institutions nor growth-inducing structural factors. In contrast, when structural factor conditions induce rulers to follow policies favorable to economic growth, authoritarian regimes tend to do better or equally well than democracies. The reason that autocracies might outperform democracies economically under such conditions is that democratic leaders have to face recurrent elections and tend to pursuit short-term interests under democracies, while development-driven authoritarian leaders do not need to focus particularly on short-term interests.