The effect of leadership on economic growth: A comparative analysis of Nigeria and South Korea

This paper argues and shows that entrepreneurial-transformation-visionary leadership is one of the fundamental causes of the differences in economic growth and development between Nigeria and South Korea. Even though these two countries are from different developing regions of the world, they had approximately similar levels of gross domestic product (GDP) and per capita real GDP in the early 1950s, but the divergence in economic growth and development between both countries became more pronounced since the later part of the 1960s. Arguably, one could attribute South Korea’s economic growth success story to the transformational-entrepreneurial-visionary leadership styles of Syngman Rhee and his successors such as General Park Chung-Hee, even though they were autocrats. We also show that Nigeria as an independent nation had its own share of autocratic leaders since the mid-1960s, and that its economic growth and development predicament since its independence could be attributed to the absence of transformational-entrepreneurial-visionary leaders. Therefore, we posit that dysfunctional leadership is one of the fundamental causes of Nigeria’s economic growth quagmire. To support our assertion, we examine the number of leaders who served as presidents and/or prime ministers since the attainment of independence in each country, and we also evaluate the macroeconomic policy choices of these leaders. Despite the fact that the leaders in South Korea were autocrats until the 1990s, we find that they had the transformational-entrepreneurial-vision to embrace macroeconomic policies, which provided the incentives for various forms of business investment.  In contrast, Nigerian leaders, beginning with Sir Abubakar Tafawa Balewa and his successors, such as General Yakubu Gowon, appeared to embrace regionally-based distributional macroeconomic policies, which may have prompted national resentment and thus contributed to the observable regional-ethnic division in Nigeria. In addition, we use economic data, covering six decades, to provide a comparative analysis of the effect of transformational-entrepreneurial-visionary leadership on economic growth and development in both countries. We find that South Korea’s real GDP is roughly five times larger and its per capita real GDP is roughly ten times larger than those of Nigeria even though both countries had similar levels of real GDP and per capita real GDP during the early 1950s.