The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change
AbstractIndividual leaders have been central to the transformation of organizations, political institutions and many instances of social and economic reform. In this paper we take a first step towards analyzing the role of leadership to ask: when and how does a leader engineer change? We show that while underlying structural conditions and institutions are important, there is an independent first-order role for individual agency in bringing about change and thus transforming the institutions. We emphasize the key nature of the symbiotic relationship between followers decisions' to willingly entrust their faith in the leader and the leader's initiative at leading them. This two-way interaction can endogenously give rise to threshold effects; slight differences in the leader's ability or the underlying structural conditions can dramatically improve the prospects for successful change. Given the centrality of this leader-follower relationship, we further explore conditions under which an individual may deliberately prefer to follow an ambitious leader with divergent interests rather than a benevolent one with congruent preferences. Thus by virtue of having followers, both `good' and `bad' leaders may be effective at bringing about change.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1128.
Length: 45 pages
Date of creation: Jun 2007
Date of revision:
Leadership; Followers; Change;
Other versions of this item:
- Sumon Majumdar & Sharun Mukand, 2008. "The Leader as Catalyst – on Leadership and the Mechanics of Institutional Change," CESifo Working Paper Series 2337, CESifo Group Munich.
- P41 - Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-20 (All new papers)
- NEP-BEC-2007-07-20 (Business Economics)
- NEP-CBE-2007-07-20 (Cognitive & Behavioural Economics)
- NEP-CDM-2007-07-20 (Collective Decision-Making)
- NEP-MIC-2007-07-20 (Microeconomics)
- NEP-SOC-2007-07-20 (Social Norms & Social Capital)
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