Political institutions, leaders, and public spending

• Main Author: Gjerløw, Haakon
• Format: Dissertation
• Language: English

Political institutions affect the incentives political leaders have when spending public resources. This relationship is among the most debated in political economy. By shaping the motivations and capabilities of political leaders, institutions systematically affect the type of assets that leaders pursue, the quality of those assets, and the distribution of benefits from those assets. These different choices carry implications for the overall development of nations. This dissertation investigates the differences between autocratic and democratic systems of governance, and how leaders of such systems differ in their investments. Analyzing novel data on investment assets, it is argued that autocratic leaders put relative emphasis on types of assets that can be targeted towards more wealthy and smaller social groups, compared to democratic leaders. This contributes to better quality in the goods and services provided by democratic governments. Furthermore, autocratic governments seem to prioritize a rich elite, while elections in both democratic and nondemocratic regimes can induce leaders to prioritize electorally important (narrow) geographical areas.