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Blessing or bane: The absence of a leader, political selection, and economic growth

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  • Cheng, Maoyong
  • Meng, Yu
  • Zhang, Muyang

Abstract

In this study, we explore economic consequences of the absence of a political leader utilizing China's political system characterized by interlocked movements of personnel and a sophisticated procedure of selection and appointment before a local leader takes office. Using data during 2009–2018, we find that the absence of a leader weakens economic growth during the absence period, but local economic growth is stronger during the new leader's tenure. We propose two potential mechanisms, compensation effect and selection effect, and find evidence supporting the latter. These results imply that political selection process is worthwhile even if it harms the economy in the short run.

Suggested Citation

  • Cheng, Maoyong & Meng, Yu & Zhang, Muyang, 2024. "Blessing or bane: The absence of a leader, political selection, and economic growth," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
  • Handle: RePEc:eee:jeborg:v:227:y:2024:i:c:s0167268124003354
    DOI: 10.1016/j.jebo.2024.106721
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    More about this item

    Keywords

    Absence of a leader; Economic growth; Political selection;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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