Does Presidential Ideology Move the Economy? Evidence from Colombia, 1998–2025

This paper studies the extent of the effects that the ideology and radicality of a Colombian president has on the nation’s economic indicators: specifically inflation and exchange rate. Using monthly data from Banco de la Republica and ideological survey scores from Latin American Parliamentary Elites Project (PELA-USAL), we constructed linear, polynomial, and XGBoost regression models alongside time series analyses to test these results. The results showed an especially strong negative correlation (r = -0.68) between a president’s ideology score and the exchange rate, suggesting that right wing presidents are associated with a stronger valuation for the COP (Colombian peso), on average. However, XGBoost feature importance rankings show that the ideological variables measured are weak predictors relative to a lagged economic momentum. Finally, we extended our findings to a real-time test against Colombia’s 2026 presidential election, to try to understand what could happen once the new president is elected.