When Elders Rule:Is Gerontocracy Harmful for Growth?
We study the relationship between gerontocracy and aggregate economic performance in a simple model where growth is driven by human capital accumulation and productive government spending (investments in ICT). We show that gerontocratic élites display the tendency to underinvest in public education and productive government services, thus being harmful for growth. In absence of inter-generational altruism, the damage caused by gerontocracy is mainly due to the lack of long-term delayed return on investments, originated by the shorter life horizon of the elder ruling class. An empirical analysis is carried out to test theoretical predictions across different countries and different economic sectors. The econometric results confirm our main hypotheses.
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|Date of revision:||08 Aug 2013|
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