When Prince Harry married American actress Meghan Markle last year, their wedding was lauded for bringing modernism to that most traditional of institutions, the British monarchy. Their first child, a son, was born Monday morning, and the world’s eyes are once again on the couple and how their approach to parenting might buck conventionality for the British royal family.

The birth of their baby also makes it a good time to examine the overall state of the modern monarchy, says Wharton management professor Mauro Guillen, who has conducted research on this form of government and how the economies of countries that employ it stack up against those without monarchies.

Guillen recently sat down with Knowledge at Wharton to discuss his research. An edited transcript of the conversation follows.

Knowledge at Wharton: Your research on this topic focuses on the relationship between property rights and the economy for monarchies compared with republics. What are some of your key findings?

Mauro Guillén: What I found was essentially that monarchies tend to protect property rights in the contemporary world much better than republics in general — and in particular, than dictatorships. That, in the end, results in better economic performance as measured by living standards. So in other words, people who live in countries that have a monarchy tend to enjoy higher standards of living than those in republics, precisely because monarchies protect property rights to a greater extent.

Knowledge at Wharton: Was there a distinction between different types of monarchies in those findings?

Guillén: Absolutely. What we also found is that constitutional monarchies, such as the British monarchy, perform much better than non-democratic monarchies or simply absolutist monarchies, of which there are three or four in the world right now as we speak.

Knowledge at Wharton: Monarchies are a pretty traditional form of government. What does your research say about how they function in the contemporary world?

Guillén: Well, the contemporary world is not only modern, it’s actually a mix of modernity and tradition. And we see this in many spheres of life. One of them is in the economy, of course, where we have, for example, family firms. But we also see this in the political system, where we have constitutional monarchies and also other types of monarchies. Essentially what we see in the world is that some people in some parts of the world try to cling to their traditions. They prefer to incorporate some elements. It’s not that they live under Middle Ages conditions — no, not at all. It’s just that for whatever set of reasons, to a very large extent cultural and historical, they have preserved some aspects of tradition — especially in their political system.

Knowledge at Wharton: Do you think the world, and Americans in particular, often have too narrow a view of monarchies?

“People who live in countries that have a monarchy tend to enjoy higher standards of living than those in republics, precisely because monarchies protect property rights to a greater extent.”

Guillén: I think Americans are a little bit schizophrenic about the topic of the monarchy. So on one hand, Americans obviously are against monarchies, because this country was founded — it became independent — as a result of a war of independence against a monarchy, against an empire, the British Empire which was, of course, closely identified at the time with a monarchy.

But on the other hand, Americans also have this fascination with the monarchy. We see this in Hollywood movies. We see this in the kinds of bedtime stories that parents tell their children. We see this in, for example, what happened in this country when Meghan got married to Prince Harry. That is to say that the entire country was mesmerized, and that there was talk of an American princess and all of that. Now, this is not the first time that an American woman has married either a prince or a king. So we’ve seen this not just most recently with Meghan and Harry, but also decades ago in Jordan — or in Monaco with our own Grace Kelly, who was, if you remember, born here in the Philadelphia area. So there is a long tradition of Americans marrying foreign princes and kings. And this is something that I think is very much a part of the American psyche.

Knowledge at Wharton: What issues do you think are brought up by the fact that Meghan and Harry are having their first child?

Guillén: I think this is going to be an important moment for many reasons. One of them is that this is a unique marriage. It is a unique marriage because while it is true that Harry is unlikely to become king — although you never know, because look at what happened nearly a hundred years ago in the U.K. — a lot of people are excited about learning about this magical couple and about their baby.

I think it is, by the way, a sign of the modernization of the monarchy itself that we continue to see that princes are getting married to people who do not belong to royal families, and they are even willing to go to other parts of the world, like the United States, to find a suitable spouse.

Knowledge at Wharton: This news is coming about a year after Prince Harry and Meghan got married, and it seems like they’ve been bucking a lot of traditional norms just in their couple-hood in general.

Guillén: Oh, absolutely. I think they have been coming across over the last few months as a couple that could be your next-door neighbors — so very youthful, very authentic, very direct — and just a happy couple who just got married. And now they’re having a baby. So I think given all of the bad news coming from all four corners of the world, they actually send a very uplifting message.

Knowledge at Wharton: What do Meghan’s experiences over the past year say about the modern monarchy and what we can expect from monarchies in the future?

Guillén: Monarchies and the families are very complicated in terms of the behavioral code that they have and all of the traditions and all of that. I think Meghan has struck a very good balance. She has to observe the rules, but at the same time, she comes across as being completely natural and completely accessible. And I think that is a very good message and is one of stability in the midst of all of this bad news that we have in the world.

Knowledge at Wharton: Currently in the U.K., there’s a lot of uncertainty surrounding Brexit, and your research actually talks a little bit about the continuity that monarchies provide. How is the British monarchy impacting both the current Brexit negotiations and also whatever happens next?

Guillén: I think there are many lessons to be learned from this process that started two years ago when the Brexit referendum unexpectedly resulted in the desire of a majority of the British people to leave the European Union.

The first thing I would observe is the absolutely incredibly good behavior on the part of the Queen, who is the head of state. But she is a queen who doesn’t really rule, right? She reigns over her citizens but is not the executive in the country. That’s the prime minister. She has adopted a clearly neutral stance, you know — not intervening in saying what she prefers the outcome to be. And she has continued to do that during the negotiations, except for a couple of occasions last year when some people interpreted a few comments that she made as implying that she was more in the “remain” camp.

“Monarchies and the families are very complicated in terms of the behavioral code that they have and all of the traditions and all of that. I think Meghan has struck a very good balance.”

The other important thing is that, as you know, the situation in the U.K. has become increasingly chaotic because there is no agreement with the European Union as to exactly what the terms of the exit will be and what’s going to happen the day after in the relationship between the United Kingdom and the European Union. And the Queen, again, has been essentially neutral in that debate that has, as you know, divided parliament and divided the entire country.

What I would also say is that, yes, if the U.K. were a republic and didn’t have a queen — who is a symbol of national unity — I think Britain would be having a much harder time because as you know, the country is bitterly divided, and parliament is also split…. So I think that, yes, that Britain is having a slightly better time with this whole Brexit business because they have a monarchy. They have a unifying symbol as the head of state.

Knowledge at Wharton: And unlike the U.S., their elections are a little more fluid, so they’ve cycled through several leaders other than the Queen in the past couple of years. And it looks like they may be getting another at some point in this process.

Guillén: Yes, absolutely. This is a parliamentary system, so you do not elect the prime minister directly. You elect a parliament, and then parliament elects the prime minister. But by that same token, parliament can also get rid of a prime minister, and that happened with David Cameron a few days after the referendum. And now, as of today, it seems as if Theresa May may also be on her way out very quickly.

So yes, parliamentary systems — this is not just unique to the United Kingdom — tend to be more fluid, and governments get replaced and prime ministers get replaced very quickly. In the United States, of course, we have a presidential system, and we tend to stick to our four-year electoral calendar for presidents of the country, of our republic. So yes, I think from that point of view and also the fact that in a parliamentary system you had a head of state who is somebody — a monarch — who stays there for life and provides a measure of stability and continuity.

Knowledge at Wharton: In the U.K., they’ve had the same head of state in Queen Elizabeth for a very long time, and it’s unclear when that’s going to change or who would be taking over for her when that happens. Do you feel like there could be some instability created by that, just because she has had such longevity? Are there things that they could do to mitigate that — even though we don’t know whether it would be Prince Charles or Prince William — or like you said, maybe it would be Prince Harry.

Guillén: Well, we’re all hoping that it will be Prince Charles. We all hope that he lives a very long life.

“If the U.K. were a republic and didn’t have a queen — who is a symbol of national unity — I think Britain would be having a much harder time.”

Knowledge at Wharton: Right.

Guillén: But yes, women in his family — in the British royal family — have proved to die at a very advanced age. And that, of course, includes most famously Queen Victoria. But Queen Elizabeth has already broken the record, in that she is the one of the longest-serving monarchs in the world, in world history — as far as recorded history goes. So yes, that would be a huge transition, because she became queen in the 1950s, so it has been a long time. A lot of things have happened in the world, over such a long period of time.

But again, the British are used to these long reigns. It happened with Queen Victoria, and it seems to me that when Queen Elizabeth II passes, this will be a very, very important turning point in British history, and I would also say in world history. And let me tell you, billions of people are going to be watching that funeral on TV. Hopefully it will be Prince Charles who will become king at that point after, as you know, having been a prince for a very, very long period of time, as well.

So that will definitely be — whenever that happens, in the next years, I guess, or hopefully a decade or more — that will be an event of global proportions which is likely to attract a lot of attention.

Knowledge at Wharton: Looking beyond Britain a little bit, are there other monarchies around the world that you think are interesting to keep an eye on?

Guillén: Well, I think one that fascinates me, of course, is the Japanese monarchy. Japan, like the United Kingdom, has been a parliamentary democracy since the end of World War II. And if you remember, General Douglas MacArthur initially had instructions to remove the monarchy. But then he actually asked Truman if it would be possible to keep the emperor in place — Hirohito at the time — because he thought that it would be, again, an instrument of stability in post-war Japan, a country that needed to be reconstructed from all points of view. So it’s again another monarchy that stretches centuries back in history, a monarchy that has, yes, in some periods of time been a force for evil. There’s no question about it. It did justify the atrocities and the abuses that Japan committed during World War II and prior to World War II, especially in China. But since 1945, it has been a force for continuity and stability, and I think it has helped turn Japan into the prosperous democracy that it is today. So that’s one that I find particularly fascinating.

“We think of monarchies as if they were anchored in the past, but in fact they do change, and they do adapt, and they do evolve.”

Knowledge at Wharton: And they’re at a time of transition right now, as well.

Guillén: Oh, absolutely. You see, this is the thing about monarchies. We think of monarchies as if they were anchored in the past, but in fact they do change, and they do adapt, and they do evolve. Sometimes they’re clumsy, and it seems as if they’re not changing quickly enough. But let’s not forget that for every monarchy that gets into trouble or that doesn’t do the job well, there are at least two or three presidents of republics that also misbehave, or they happen to be corrupt, or they make decisions for the country that are disastrous. So I don’t think that one can generalize and say, “Oh, monarchies are traditional forms of government, and they’re all bad because it’s anachronistic for us to have monarchies in the 21st century.” And it’s equally inaccurate to say that all republics and all elected officials are just wonderful, right?

So I think once again, some parts of the world — some countries — prefer certain forms of government over others. And I think it’s perfectly OK that a few more than 40 countries in the world right now continue to have the monarchy as the form of government. But again, in most of them, these are democracies, and therefore the monarch — the king or the queen — is purely a constitutional monarch who doesn’t have any power. It’s just a figure, a head of state that helps bring the country together and provides for continuity and stability.