A Leadership Curse? Oil Price Shocks and the Selection of National Leaders

Kodjovi Eklou

Cahiers de recherche from Departement d'économique de l'École de gestion à l'Université de Sherbrooke

Abstract: This paper examines the relation between oil price shocks and the selection of educated national leaders. Exploiting a cross-country dataset on national leaders and a Difference-in-Difference approach, I find that positive oil price shocks significantly reduce the probability of selecting educated leaders--a ‘leadership curse’. I show that this phenomenon is driven by ethnically fragmented developing countries. I develop a model where a coalition of ethnic chiefs offers an electoral support to candidates in exchange for future favors. The model shows that positive oil price shocks deter the candidacy of educated citizens by allowing the coalition to tax the expected payoff from office. Hence, elites bargaining may constrain the ability of citizens to induce significant changes through the ballot box. The paper adds to the political aspects of the “resource curse” by showing that resource booms affect the “quality” of politicians before they take office.

Keywords: Leadership curse; Oil price shocks; Political selection; National leadership. (search for similar items in EconPapers)
JEL-codes: D72 Q33 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2020-06
New Economics Papers: this item is included in nep-cdm, nep-ene and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:shr:wpaper:20-05

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