Working Paper
Do Businessmen Make Good Governors?
Florian Neumeier
Ifo Institute, Munich, 2016
Ifo Working Paper No. 230
Ifo Institute, Munich, 2016
Ifo Working Paper No. 230
![](https://www.ifo.de/DocImg/wp-2016-230-neumeier-businessmen-good-governors.jpg?c=1689236903)
This paper empirically evaluates the economic performance of U.S. state governors who came to the position from a business background (CEO governors), focusing on income growth, unemployment, private investment, and income inequality. Methodologically, I apply a matching method to account for the endogeneity of political selection. I find that the tenures of CEO governors are associated with a 0.6 percentage points higher annual income growth rate, a 0.4 pp higher growth rate of the private capital stock, and a 0.6 percentage points lower unemployment rate than are the tenures of non-CEO governors. Income inequality decreases when CEO governors hold office.
JEL Classification: C210, D310, E240, J600