Hereditary leadership has been an important feature of the political landscape throughout history. This paper argues that hereditary leadership is like a relational contract which improves policy incentives. We assemble a unique dataset on leaders between 1874 and 2004 in which we classify them as hereditary leaders based on their family history. The core empirical …nd-ing is that economic growth is higher in polities with hereditary leaders but only if executive constraints are weak. Moreover, this holds across of a range of speci…cations. The …nding is also mirrored in policy outcomes which a¤ect growth. In addition, we …nd that hereditary leadership is more likely to come to an end when the growth performance under the incumbent leader is poor.