2007): The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change,Working Paper

Michael Waldman and numerous seminar participants. Individual leaders have been central to the transformation of political institutions, organizations and many instances of social and economic reform. Why are some leaders able to take advantage of opportunities to successfully catalyze large-scale change while others fail? We argue that the key to understanding a leader’s effectiveness lies in dissecting the symbiotic two-way relationship between the leader and his followers. On the one hand, a leader who is effective at coordinating mass support to bring about change, attracts a large number of followers. In turn, followers have a bottom-up role in empowering and rallying support for the leader, thereby making him more or less effective. This two-way leader-follower interaction can endogenously give rise to threshold effects: ‘small ’ differences in leader ability can have a dramatic impact on the prospects for change. By endogenizing followership, our framework also suggests that an economic crisis can make even mediocre leaders a potent catalyst for change on all (even non-economic) issues. Finally, we show that individuals may deliberately prefer to follow a leader with a self-serving agenda, rather than a leader who shares their preferences. By empowering such a self-serving leader, followers make him a more effective agent of (both good and bad) institutional change