Are political leaders with a business background any different?

The argument holds that leaders with business experience make smaller contributions to collective defense because they are egoistic and more comfortable relying on a powerful ally for their defense. An analysis of defense expenditures in 17 non‐U.S. members of the North Atlantic Treaty Organization from 1952 to 2014 provides evidence consistent with the theory. The findings suggest that leaders with business experience are more likely than other heads of government to act as self‐interested utility maximizers.

Here is the full study, by Matthew Fuhrmann.  Via the excellent Kevin Lewis.

Comments

Leading to the natural question when looking at billionaire heads of state - is Trump better at self‐interested utility maximization than Berlusconi?

The sad answer is not even close - Berlusconi knew how milk his position with the sort of flair that Trump so obviously lacks. Throw bunga-bunga while in office into the mix, and Trump looks like a frump.

The last two GOP businessmen Presidents have been a disaster for the national debt. They run the country like a private equity style leveraged buyout. Use other people's money to drive up the debt and *hope* that economic growth will make up the difference. Reagan did the same thing but ended up quadrupling the debt, leaving both a banking crisis and a recession in its wake.

Hope is not a strategy and America today looks more like Toys R Us than the world's mightiest economy. Trump's experience at the pointed end of numerous bankruptcy proceedings will serve the country well as it heads into fiscal bankruptcy caused by reckless spending and nonsensical tax cuts.

"Reagan did the same thing but ended up quadrupling the debt, leaving both a banking crisis and a recession in its wake."

You're blaming the S&L crisis on Reagan expanding the national debt? I could imagine a story where Reagan is partly to blame, but not because he expanded the debt.

Often blamed on the tax cuts he fought for, but let's see:
FY1988 $909 billion
FY 1980 $517 billion

Revenue is up 75%. Did Congress overspend? Yes it did.

Some of those tax cuts were rolled back with the 1986 tax reform. Also, Reagan raised payroll taxes with the 1983 Social Security reform. So, yes, revenue went up with a growing economy and some tax increases.

At the same time, defense spending went up $150 billion (116%) over that period so there's that, too.

You are all aware that it is congress that sets the budget, right???

Congress passes a budget that the President pledges to sign. It's a negotiation.

More often congress passes the budget just before it must be passed and then goes on break leaving the president a bad and a worse choice. Typically the president is lucky to get anything at all that they want in a budget

The President proposes a budget, and then Congress adds on extra lard, which the President will sign just to get it done.

https://krugman.blogs.nytimes.com/2008/01/17/reagan-and-revenue/?mtrref=www.google.com&gwh=6C473E0111E04D96C875EB127ACBD206&gwt=pay&assetType=REGIWALL

It makes sense intuitively that leaders with more business experience would be more likely to prioritize what they see as cutting unnecessary costs. Whether or not that's actually a good idea depends on the specifics. It feels a little strange to call that egoistic behavior, because I would also consider building up your military unnecessarily to be a form of egoism/egotism, so I would be interested in seeing how they define and measure that.

Sometimes, it is both - the French and Russians love their military parades, but the leader is not the person paying for it, while basking in the reflected glory.

levant – implying the sun also rises – Descartes :gaiety – acting in the same way – Confessions

Self‐interested utility maximizers. That's a lot of words to say selfish assholes.

Counting to three is outside your comfort zone?

Given that the study looked at NATO and Trump has been pressuring the other countries to pony up, some of the comments here are extremely stupid and biased.

Pony up for what? Their own defense? Strange how the U.S. always seems to know what is best for everyone else.

The whole Huawei hoohaw being the latest example. If only the U.S. actually was in a position to sell turnkey 5G network infrastructure. You know that the NSA must be kicking itself for that small lapse in a strategic telecommunications vision. Not that the U.S. would ever, ever engage in the stupidity that is industrial policy.

Q.E.D.

No kidding. Getting people to honor the treaties they've signed is now "strangely knowing what is best for everyone else" in the middle of the Trump Era. Give this poster a break, he has a very sad three years.

Still, Huawei hoohaw is an awesome band name, so he's not completely useless.

Well, in terms of NATO contributions it doesn't really seem to be about the USA knowing what's good for the European counties, individually or collectively, but about European countries simply living up to what they agreed to.

One might stretch their imaginations an assume that when they agreed to 2% of GDP (or whatever the 2% is based on) they thought that was in their own interest.

Everyone using the term Nato contribution is already wrong. One can certainly say that NATO members make commitments to defense spending levels (with the quite notable exception of Turkey, whose interests in the Middle East are certainly not the same as America's) fall short, but NATO is not an actually a military force where money is contributed.

NATO is not the Delian League, though America certainly seems to be acting like the Athens described by Thucydides. Not that one should expect a businessman to understand that, regardless of how often his military commanders point out to him what NATO is.

Or maybe they simply don’t see the point of spending hundreds of billions of dollars on defense when there is no conceivable military challenger to the US and its allies? Because as businessmen they grew up in an environment where power comes from the positive-sum game of creating the most consumer value rather than the zero-sum game of having the most guns?

It has been brought to my attention that DJT was on SNL on 11/7/2015. At first I thought it was a scam, but he was on, and it was prescient. Bet SNL is embarrassed with the free publicity.

SNL was fine with helping DJT win the Republican nomination, because they thought he was a candidate sure to lose. Of course ever since he won the presidency they became part of The Resistance, and have created at least 100 skits more critical of Trump than their hands-off approach to Obama. SNL literally sang Obama a tearful love song goodbye.

From this study, one would naturally infer that nearly all European leaders since the inception of NATO have had business experience.

Yeah right -- businessmen are egoistic, unlike Nancy Pelosi, and Bill Clinton, and (God Help Us) Barack Obama. Not a hint of ego in any of them!

Hang tight everybody, only five more years of President DJT.

"The argument holds that leaders with business experience make smaller contributions to collective defense because they are egoistic and more comfortable relying on a powerful ally for their defense." In other words, European leaders with business experience will rely on the U.S. for their defense.

Is science important to a growing economy and prosperity? Peter Thiel seems to think so. Scientists are leaving the federal government in droves. Will the private sector (Thiel and friends) make up for the loss? https://www.washingtonpost.com/climate-environment/science-ranks-grow-thin-in-trump-administration/2020/01/23/5d22b522-3172-11ea-a053-dc6d944ba776_story.html

The story you link to is about some well needed churn in federal agencies. What a crazy concept that maybe the Dept of Agriculture shouldn't be in DC but out where there's a chance to see a farm. It may not be popular with the pro-bloat folks though.

One word: Israel

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