Revisión literatura en ciencia economica, nos señala que cuando empresarios entran en política...
Revisión literatura nos señala que cuando empresarios entran en política:
- Promocionan reformas orientadas a mercado.
-Priorizan gasto en inversión pública e infraestructuras.
- Disminuyen consumo público y transferencias.
- Aumentan crecimiento económico.
The economic consequences of businesspeople in politics: A survey
Introduction
Politicians
influence economic outcomes to a large extent. Citizens desire
competent politicians who are able to handle challenges and to lead
their countries in a suitable manner. In many countries, citizens are
concerned that the incumbent politicians just fail. Failure includes bad
economic performance, poor handling of geopolitical conflicts and
issues with migration. A major question is which attributes of
politicians influence economic policies and outcomes. I investigate how
politicians’ occupational experience influences economic policies and
outcomes.1
Politicians
with business experience (business politicians) are likely to influence
economic outcomes. Business politicians may, for example, promote
economic performance. They know how to run an enterprise or have
executive experience in the private sector. Successful entrepreneurs are
creative, adaptive and competitive. They have learned to take
individual responsibility, are patient, and are hesitant regarding
regulation and bureaucracy. Other attributes of business politicians
may, however, decrease economic performance: business politicians pursue
self-interests and are inclined to lobby for the interests of their
industries. The personal characteristics and the expertise of
businesspeople in politics may well translate into public office.
Leading a country is, admittedly, different than leading an enterprise.
Business politicians need to organize majorities within the electorate.
Need for compromise might be larger in public office than when running
an own enterprise. It remains as an empirical question how business
politicians influence economic outcomes such as economic performance. I
review the empirical literature describing the economic consequences of
businesspeople in politics.
Discussing
the economic consequences of politicians with business experience
requires to define what business politicians are. First: Which type of
politicians do the empirical studies consider? The literature relates to
heads of governments (prime ministers and presidents) and cabinet
members (ministers and secretaries of state) at the national level,
governors and cabinet members at the sub-national level such as the US
states, members of parliament (legislators) at the sub-national level,
mayors and councilors at the local level. Second, business experience is
measured in different manners in the individual studies. It includes
experience as Chief Executive Officer (CEO) or a Chief Financial Officer
(CFO) of a company, an owner or manager of a small company. Individual
studies focus on experience in the private sector which does not need to
encompass executive tasks. Third: To whom are business politicians
compared? This also differs between studies. Some studies compare
politicians with business experience to politicians with any other
occupation. Other studies disentangle consequences of many individual
occupations. I relate to the type of politicians, the measurements of
business experience and the comparison group when discussing the
individual studies.
The
results show that business politicians have quite some effects on
economic policies and outcomes. Business politicians were active in
promoting globalization and market-oriented economic reforms. A strong
result at which scholars arrive based on data at the national,
sub-national and local level is that business politicians influenced
budget composition. Business politicians prioritized public investment
expenditure and increased spending on infrastructure, roads and
transport. They decreased spending on public consumption and transfers.
In the US states, market-oriented policies of business politicians
increased economic growth.
My
survey connects to the literature that examines how characteristics of
political leaders relate to economic outcomes. The education of
political leaders influences economic performance. Educated political
leaders tended to increase, for example, economic growth (e.g., Jones
and Olken, 2005, Besley et al., 2011, Yao and Zhang, 2015, Carnes and
Lupu, 2016, Easterly and Pennings, 2016).2 Political leaders
with significant work experience increased economic growth in
democracies (Shi, 2024b). Educated local leaders decreased taxes, were
active in providing infrastructure and abstained from corruption (Pelzl
and Poelhekke, 2023). Local leaders with managerial skills increased
growth of their cities (Carreri and Payson, 2024). Political leaders’
background in economics also influenced economic performance. Countries
that were ruled by politicians who studied economics had higher GDP
growth than countries that were ruled by politicians who had another
field of study (e.g., Brown, 2020. Carnes and Lupu (2023) survey the
literature on the economic background of politicians). I discuss whether
having business experience influences economic policies and outcomes.
Characteristics
of ministers and legislators relate to economic policy outcomes.
Finance ministers with financial expertise and non-blue collar
background decreased budget deficits (Jochimsen and Thomasius, 2014,
Hayo and Neumeier, 2016). Finance ministers with economic education were
active in creative accounting (Clémenceau and Soguel, 2017).
Development ministers who spent a long time in the development office
obtained large aid budgets (Fuchs and Richert, 2018). Doctors
(physician-trained) health ministers increased hospital capacities,
capital, and funding by the statutory health insurance (Pilny and
Roesel, 2020). Legislators who were active as attorneys hesitated to
vote in favor of tort reforms that restrict tort litigation but were
active to support bills that extend tort law (Matter and Stutzer, 2015).3
My survey discusses the extent to which business background of
ministers and legislators relates to economic policies and outcomes.
The
literature on economic consequences of business politicians is
developing dynamically. My survey includes all papers on the economic
consequences of business politicians: To make sure that I do not miss
individual studies, I have done an encompassing literature search and
contacted the experts in the field asking whether they are aware of
other studies.
In
the next section, I discuss the background on why and how business
politicians are likely to influence economic policies and outcomes.
Section 3 discusses the empirical evidence at the national level. I
discuss the measurement of business politicians at the national level,
the empirical strategies and the results based on economic outcomes.
Sections 4 Subnational level, 5 Local level discuss the evidence at the
sub-national and local level. Section 6 concludes and describes avenues
for future research.
Section snippets
Background
Politicians
with business experience are expected to influence economic policies
and economic performance for many reasons. Individual personality traits
of entrepreneurs are likely to be decisive when entrepreneurs become
politicians (Obschonka and Fisch, 2018). Occupational experiences also
affect individual attitudes (Kitschelt and Rehm, 2014). Individual
attributes of businesspeople that are likely to influence economic
performance include creativity, willingness to innovate, awareness of
National level
Quite
some empirical studies investigating effects of political leaders
(prime ministers and presidents) with business experience on economic
policies and outcomes use data at the national level (see Table 1, Table
2).
US states
In
the US states, governors with business experience increased the annual
growth rate in personal income and the private capital stock by 0.5 and
0.4 percentage points and decreased the unemployment rate by 0.6
percentage points (Neumeier, 2018). These effects are numerically large
and established by a rigorous empirical framework. Neumeier (2018) uses a
matching approach which compares two governors who are statistically
very similar (ideally identical) except that one governor has business
US cities
In
US cities, mayors with business experience influenced municipal fiscal
policy: they increased expenditure on infrastructure and decreased
redistributive spending (Table 6). Kirkland (2021) examines data from
248 US cities in 44 US states over the period 1950–2007. 32% of the
mayoral candidates have business experience. “Owners or corporate
officers (CEO, COO, president, vice president, treasurer, etc.) of a
business or firm engaged in the sale or provision of goods or services
for profit”
Conclusion
Business
politicians influence economic policies and outcomes. They attracted
foreign direct investment and were active in signing trade agreements.
At the national and sub-national level, business politicians promoted
market-oriented reforms and consolidated budgets. The empirical evidence
also suggests that business politicians influenced budget composition:
they prioritized public investment over government consumption. Those
policies increased economic growth in, for example, the US states.
Declaration of competing interest
I disclose financial support from the Initiative New Social Market Economy.
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