Ha Joon Chang is not the only one out there. The Senior Lecturer is known to succumb to the delusion, Will Hutton’s entire oeuvre is based upon the idea. If only everyone just did what they were damn well told by an economic autocrat then everything would be vastly better. The peeps would be richer as a result of the omniscience – and the power to implement – of said economic autocrat.
As it happens it doesn’t work out like that. Economic freedom is the foundation of economic advance:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Supposedly well-intentioned dictators are often cited as drivers of economic growth. We examine this claim in a panel of 133 countries from 1858 to 2010. Using annual data on economic growth, political regimes, and political leaders, we document a robust asymmetric pattern: growth-positive autocrats (autocrats whose countries experience larger-than-average growth) are found only as frequently as would be predicted by chance. In contrast, growth-negative autocrats are found significantly more frequently. Implementing regression discontinuity designs (RDD), we also examine local trends in the neighbourhood of the entry into power of growth-positive autocrats. We find that growth under supposedly growth-positive autocrats does not significantly differ from previous realizations of growth, suggesting that even the infrequent growth-positive autocrats largely “ride the wave” of previous success. On the other hand, our estimates reject the null hypothesis that growth-negative rulers have no effects. Taken together, our results cast serious doubt on the benevolent autocrat hypothesis.[/perfectpullquote]
Even if the autocrat is benevolent it still doesn’t work. Again, economic advance is the result of economic freedom….