TRENDS: Leaders, Private Interests, and Socially Wasteful Projects: Skyscrapers in Democracies and Autocracies
| Published date | 01 June 2019 |
| Author | Haakon Gjerløw,Carl Henrik Knutsen |
| Date | 01 June 2019 |
| DOI | 10.1177/1065912919840710 |
| Subject Matter | Articles |
research-article2019
Article
Political Research Quarterly
2019, Vol. 72(2) 504 –520
TRENDS: Leaders, Private Interests, and
© 2019 University of Utah
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Democracies and Autocracies
Haakon Gjerløw1 and Carl Henrik Knutsen1
Abstract
Political leaders often have private incentives to pursue socially wasteful projects, but not all leaders are able to pursue
these interests. We argue that weaker accountability mechanisms allow autocratic leaders to more easily realize
wasteful projects than democratic leaders. We focus on one particular project, skyscraper construction, where we
obtain objective measures comparable across different contexts. We test different implications from our argument by
drawing on a new dataset recording all buildings exceeding 150 m, globally. We find that autocracies systematically build
more new skyscrapers than democracies. Furthermore, autocratic skyscrapers are more excessive than democratic
ones, and—in contrast with democracies—autocracies pursue skyscraper projects to about the same extent in rural/
poor and urban/rich societies. When investigating different mechanisms entailed in our argument, the link between
regime type and skyscraper construction seems due in large part to stronger vertical accountability mechanisms and
more open information environments in democracies.
Keywords
democracy, autocracy, skyscrapers, vertical accountability, rent-seeking, corruption
Introduction
unproductive projects—which, for construction and
development projects, more generally, can make up a
Democracies outperform autocracies on several develop-
substantial share of public funds (see Williams 2017,
ment and policy outcomes, including infant mortality
706)—may be deliberate and reflect less sanguine moti-
rates (Gerring, Thacker, and Alfaro 2012), the number of
vations. Political leaders often have personal reasons—be
children enrolled in school (Lake and Baum 2001), and
it vanity, providing cronies with opportunities for reaping
even, in some contexts, quality of government (Charron
bribes or excessive profits, or signaling the regime’s
and Lapuente 2010). Yet several studies show that autoc-
capabilities to (foreign and domestic) competitors—to
racies outpace democracies on investments in (physical)
expend public resources on costly, but societally unpro-
capital (Przeworski et al. 2000; Tavares and Wacziarg
ductive, investment projects. Regime type is, thus, poten-
2001). Some explanations for this pattern highlight more
tially relevant; a large theoretical literature has highlighted
benevolent motives combined with the high capacity of
how institutional features associated with democracy
autocratic regimes in undertaking large investment proj-
might limit such wasteful spending through constraining
ects. The large literature on East Asian development
the power of leaders or through incentivizing leaders to
states, for example, focuses on how autocratic regimes
show self-restraint (Besley 2006; Ferejohn 1986; Lake
bent at increasing economic growth have the autonomy to
and Baum 2001; Przeworski 2000).
drive up savings rates, invest in infrastructure, and subsi-
Despite this, comprehensive and systematic empirical
dize capital for export-producing industrial firms studies on whether autocratic leaders, in fact, are more
(Leftwich 2000; Wade 1990; Young 1995).
Yet, on closer inspection, many investment projects in
autocracies do not seem to be very productivity-enhanc-
1University of Oslo, Norway
ing. As Robinson and Torvik (2005) note when discuss-
ing developing countries, several countries have made
Corresponding Author:
Carl Henrik Knutsen, Department of Political Science, University of
substantial capital investments in socially inefficient
Oslo, Moltke Moes vei 31, 0851 Oslo, Norway.
projects. The seeming misallocation of investments on
Email: c.h.knutsen@stv.uio.no
Gjerløw and Knutsen
505
likely than democratic leaders to pursue societally unpro-
incentives for political leaders to get involved, mean that
ductive investment projects remain scarce. Cross-national
political actors and public financing often are involved in
measures of corruption have been used to assess links
their construction. This is corroborated by our investiga-
with democracy, reporting mixed findings (see, for exam-
tion of hundred randomly drawn skyscrapers, although—
ple, Rock 2009). However, most measures rely on cor-
as our theoretical argument anticipates—there is more
ruption perceptions, which may be artificially deflated in
frequent political involvement in skyscraper construction
autocracies without a free press to report cases of bribery,
in autocracies than in democracies. Further, we construct
theft, and excessive rent-seeking (see Knutsen 2010).
two datasets with extensive time series—one at the coun-
Corruption perception measures are also related to sev-
try-year level and one at the building level—drawing
eral other problems, such as translation and measure-
from an impressive online archive including all buildings
ment-equivalence issues, ideological biases, and exceeding 150 m, globally (Council on Tall Buildings
sensitivity to current corruption scandals. Hence, percep-
and Urban Habitat [CTBUH] 2016). We use these two
tion-based measures may yield different results than
datasets to test different implications from our argument
experience-based measures of bribery or other forms of
on regime type and skyscraper construction.
corruption (Treisman 2007). Yet, objective measures of
The empirical analysis suggests that when countries
rent-seeking or corruption have often been possible to
become more autocratic, they subsequently build more
construct only for single countries, and even experience-
new skyscrapers. This result holds up to controlling for
based indicators that cover multiple countries (e.g., on
other relevant factors such as income and urbanization,
police bribes; Afrobarometer) come with limited time
and is not due to skyscrapers being more popular in par-
series.
ticular countries (e.g., China or Kuwait) that happen to be
As an exception, recent studies on leaders, rents, and
autocratic; results are clear even when we control for
favoritism have employed a more objective measure,
country (and year) fixed effects. Subsequent analysis on
based on satellite data on nighttime light activity, to
the potential mechanisms suggest that this relationship
investigate how local economic activity increases in
partly stems from more open and critical media environ-
regions from which the chief executive originates (Hodler
ments in democracies, contributing to increased vertical
and Raschky 2014). Yet other studies have investigated
accountability. Other features associated with democracy,
how (local) political leaders and elite coalitions manage
such as stronger legislative constraints on leaders, do not
to expend public resources on excessively costly sports
seem to play a role. Furthermore, we test different proxy
stadiums or events (e.g., Delaney and Eckstein 2003).
measures of the vanity of building projects. When con-
Leaders—also democratically elected ones—may draw
ducting matching analysis at the building level, we find
on the support of organized local constituencies in the
systematic evidence that autocratic skyscrapers are more
form of fan bases, which have strong interests in con-
wasteful than democratic ones. Finally, whereas auto-
structing (even wasteful) stadiums. Despite these studies,
cratic regimes build (more) skyscrapers regardless of
the evidence base for a link between regime type and
whether they preside over a rich or poor, or urban or rural,
wasteful investment projects is relatively thin, presum-
society, skyscraper construction in democracies closely
ably reflecting the lack of relevant measures of such proj-
follows income and urbanization. Also, this latter finding
ects that are amenable to systematic comparisons across
corroborates the notion that skyscraper construction is
space and time.
more attuned to socioeconomic cost-benefit calculations
To help fill this gap, we conduct an empirical study of
in democracies than in autocracies.
how autocratic and democratic countries differ on one
type of investment project that leaders may have private
Argument
reasons to pursue, and that often constitute a substantial
drag on public resources, namely, skyscrapers. Why would leaders want to channel resources toward
Skyscrapers may be built by private entrepreneurs with-
projects that cost more than the revenue they are
out much state involvement, by state-affiliated actors or
expected to bring in? After all, these projects funnel
private actors with full funding from the state, or via other
scarce resources away from productive investments or
ownership and financial arrangements. Private entrepre-
services widely desired by citizens. One straightforward
neurs may also construct skyscrapers with indirect
answer is that they enhance the (private) utility of politi-
involvement of political actors through subsidies, provi-
cal leaders, be it through increased personal consump-
sion of complementary...
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