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Cronyism in State Violence: Evidence from Labor Repression During Argentina's Last Dictatorship

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  • Esteban F Klor
  • Sebastian Saiegh
  • Shanker Satyanath

Abstract

We study whether crony governance can extend beyond economic policy to the targeting of state violence against citizens. Specifically, we examine the logic driving the choice of firm-level union representatives who were subjected to state repression by the 1976–1983 Argentine military junta. Using an original dataset, we find a positive, nonspurious, and robust correlation between labor repression and cronyism, measured by political, business, and social connections to the regime. Our results indicate that the number of firm-level union representatives victimized by the regime is three times higher for connected firms relative to nonconnected ones. The effect is pronounced in privately owned (as opposed to state-owned) firms, suggesting that the correlation is driven by cronyism for financial gain rather than ideology or information transmission. We show that connected firms benefited from violence against union representatives by subsequently having less strikes and a higher market valuation. Our findings highlight the pervasiveness of governmental cronyism, even in cases where one of the regime's main stated goals was to curb such behavior.

Suggested Citation

  • Esteban F Klor & Sebastian Saiegh & Shanker Satyanath, 2021. "Cronyism in State Violence: Evidence from Labor Repression During Argentina's Last Dictatorship," Journal of the European Economic Association, European Economic Association, vol. 19(3), pages 1439-1487.
    • Handle: RePEc:oup:jeurec:v:19:y:2021:i:3:p:1439-1487.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvaa029
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    Cited by:

    1. Francesco Amodio & Nicolás de Roux, 2021. "Labor Market Power in Developing Countries: Evidence from Colombian Plants," Documentos CEDE 19267, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Gonzalez, Felipe & Miquel-Florensa, Josepa & Prem, Mounu & Straub, Stéphane, 2022. "The Dark Side of Infrastructure: Roads, Repression, and Land in Authoritarian Paraguay," SocArXiv zetmq, Center for Open Science.
    3. Gonzalez, Felipe & Prem, Mounu, 2020. "Police Repression and Protest Behavior: Evidence from Student Protests in Chile," SocArXiv 3xk5r, Center for Open Science.
    4. Einstoss Sebastian, 2023. "Todo está guardado en la memoria: el efecto de la violencia de estado en Argentina (Versión preliminar)," Asociación Argentina de Economía Política: Working Papers 4648, Asociación Argentina de Economía Política.

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