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Entrepreneurs in politics: key to strong economic growth!
We analyze how entrepreneurs as politicians can promote economic growth and what social effects this has.
Entrepreneurs in politics: key to strong economic growth!
A current analysis of the ifo Institute examines the role of entrepreneurs in political office and their potential impact on economic growth. The head of the Ifo Center for Public Finance, Niklas Potrafke, notes that business people could be an interesting addition to political institutions due to their market-oriented economic policies.
These entrepreneurs often advocate policies aimed at high economic performance. As a rule, they strive to reduce state social spending. However, Potrafke warns that such cuts can also cause social tensions. However, the potential benefits of such a policy cannot be ignored: reducing the burden on the budget, increasing public investment and creating incentives for the private sector could be seen as positive outcomes of an entrepreneurial policy.
Impact on economies
In particular, economies struggling with low growth could benefit from greater representation of entrepreneurs in political office. Potrafke's analysis shows that the positive impact of business politicians depends heavily on market competition and effective institutions that are necessary to combat corruption.
A key concern is to ensure that entrepreneurs in political positions do not abuse their office for personal corporate interests. This requirement is essential to maintain the population's trust in political institutions and to guarantee the effectiveness of the new policy.
Publication and evaluation
The evaluation was carried out on behalf of the New Social Market Economy Initiative and is part of a scientific article by Niklas Potrafke entitled "Are entrepreneurs successful politicians? An evaluation of the research results". This article was published in issue 3/2025 of the ifo Schnelldienst and offers a comprehensive analysis of the topic.
Those interested can find additional information on the topic in the full publication, which is available at ifo.de is available. The results of the analysis are explained in detail there.