What Nelson Mandela can teach economists

Although I am known for my creative titles, this one is not mine. Chris Blattman, a political scientist at Columbia University, used a similar title for a blog post on Dec. 9. He was referring to a guest blog post at the Washington Post by the University of Connecticut political scientist Stephen Benedict Dyson.

In his blog post, Dyson himself was referring to another post in the same paper by a New York University professor of politics, “Surveying reaction to the passing of Nelson Mandela, Joshua Tucker ably states the view of many political and social scientists on the importance of leaders: they matter less than is commonly assumed. Compared to journalists, policymakers, historians, and citizens, political scientists attribute less importance to individual political figures and more to broader causes, such as the economic and social factors Tucker cites as driving democratization in states like South Africa.”

Dyson then goes on to explain that one reason of trivializing leaders is the nature of scientific exploration, which tries to move “from studying specific phenomena to developing general explanations.” Another is that the distinctive features of a leader are difficult to measure and their actual impact on outcomes even harder to quantify.

I would propose a third explanation. Many social scientists are keen to use mathematical models and complex statistical techniques to appear close to the hard sciences. This “math envy” is nowhere more apparent than in economics. To an economist or political scientist looking at the determinants of democratization, Mandela would be an “error term,” a deviation from what her statistical model would predict.

That is such a big shame, as academics who have spent some time in the real world would confirm.
Here’s Dyson quoting Henry Kissinger, “As a professor, I tended to think of history as run by impersonal forces. But when you see it in practice, you see the difference personalities make.”

The impact of leaders on economic outcomes is equally overlooked. How much would Turkey have grown during the last decade had Prime Minister Bülent Ecevit not been bold enough to bring Kemal Derviş from the World Bank to execute a major economic reform program after the 2001 crisis? Or if his successor, Recep Tayyip Erdoğan had not been wise (or clueless) enough to stick to the program? Or, if Turgut Özal had not implemented key reforms in the early 1980s? 

There has been some recent research on the impact of leaders on economic growth. While a 2005 paper by Benjamin Jones and Benjamin Olken did find that leaders affect growth, especially in autocratic regimes where there are few constraints on their power, their results have been questioned in a fresh paper by William Easterly and Steven Pennings.

I do not know if South Africa would have grown more or less without Nelson Mandela. I guess it doesn’t matter. After all, I would not put a price tag on freedom and reconciliation. That’s what South Africans are grateful to Madiba for.