The Personalist Penalty: New Research Shows Differences Between Dictatorships

For decades, scholars have debated whether democracy or autocracy is better for economic growth. A new study by Professors Christopher Blattman and Scott Gehlbach, and Zeyang Yu adds an important twist: not all autocracies are alike, and the most “personalist” autocracies come with steep economic costs. 

“The dangers of personal rule have been apparent since Machiavelli,” said Gehlbach. “What’s new is that we can now measure them.”

In “The Personalist Penalty: Varieties of Autocracy and Economic Growth,” the authors find that when an autocratic regime is ruled by a single dominant leader (or a small elite with unchecked power), it tends to perform significantly worse than both democracies and more institutionalized authoritarian governments.

“We tend to think of autocracy as a single category, but it’s really a spectrum of political arrangements,” said Blattman. “When power is personalized, economic decisions depend on one person’s whims rather than institutions. That’s when policy becomes unpredictable, investment dries up, and growth suffers. Personalist autocracies fall behind economically.”

The study revisits a foundational question in political economy: how do political institutions shape economic outcomes? Most prior research has treated all autocracies as a single category, comparing them collectively to democracies. But Blattman, Gehlbach, and Yu argue that this masks enormous differences between autocracies: (1) regimes such as Mexico under the Institutional Revolutionary Party (PRI), where power was constrained by a ruling party and regular term limits; and (2) autocracies such as Mobutu Sese Seko’s Zaire or Saddam Hussein’s Iraq, where leaders ruled by decree – known as “personalist” autocracies.

Drawing on data from 179 countries between 1960 and 2010, the authors extend the empirical strategy used by Acemoglu, Naidu, Restrepo, and Robinson (2019), applying a dynamic panel design that controls for country-specific traits, global shocks, and economic downturns preceding regime change. Instead of comparing democracies with autocracies, they compare autocracies with other kinds of autocracies.

Across these diverse measures, a consistent pattern emerges: whenever an “autocratic penalty” appears, it is concentrated in personalist regimes. In contrast, institutionalized autocracies—those with structured parties, legislatures, or military constraints—show growth rates statistically indistinguishable from democracies.

The team finds evidence that personalist regimes suffer from a combination of low private investment, poor public-goods provision, and higher levels of conflict. Without institutional checks, leaders face weaker incentives to provide broad-based public benefits and stronger incentives to reward a narrow inner circle.

“Our results suggest that what matters most for economic performance isn’t democracy per se, but whether a government can make credible commitments,” said Gehlbach. “Institutionalized regimes—whether democratic or autocratic—are better able to deliver stability and investment. Personalist regimes, by contrast, can’t sustain those commitments over time.”

Mobutu’s Zaire is a classic example of catastrophic economic decline under personal rule, while Mexico’s PRI-era growth exemplifies the benefits of institutionalized stability. Contemporary Russia, where President Vladimir Putin has systematically dismantled institutional constraints and become more personalist in nature, also reflects this trajectory.

The findings have implications that go beyond academic debate. For policymakers and international institutions, the distinction between democracy and autocracy may be less critical than the difference between institutionalized and personalized power.

“Not all autocracies threaten economic development equally,” said Blattman. “Democracies and institutionalized autocracies may support growth through credible institutions, policy stability, and checks on executive power. But where power is highly concentrated, economic outcomes may suffer significantly.”

In other words, efforts to promote growth and stability worldwide may depend less on transforming autocracies into democracies and more on encouraging institutional constraints—term limits, strong legislatures, and rule-based governance—within existing political systems.