Leaders, Private Interests, and Socially Wasteful Projects: Skyscrapers in Democracies and Autocracies

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.