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Businessman Candidates

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Author Info
Konstantin Sonin
Scott Gehlbach

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Abstract

Students of politics are familiar with two common forms of influence exercised by special interests over politicians: the provision of financial support to favored candidates during election campaigns, and the application of lobbying power when dealing with elected politicians. However, in certain political environments, representatives of special interests -- in particular, business owners and managers -- choose to run for office themselves, rather than simply relying on the political system to protect their interests. This paper addresses the question of why and in what circumstances businesses will follow this alternative path of influence. In so doing, it aims to contribute to an understanding of the role of institutional environment in determining the nature of special-interest politics. Expanding upon existing models of electoral competition and special-interest politics, we show that two features of weakly institutionalized environments contribute to the emergence of "businessman candidates." First, when political parties and other reputational mechanisms are weak, professional politicians will often be tempted to renege on promises made during an election campaign. In such an environment, businesses may prefer to run owners or managers of the firm for public office, knowing that the interests of such individuals will be aligned with those of the firm after the election. Second, when political competition for rents among businesses is large (due to the absence of checks on arbitrary exercise of political power, and perhaps due to a high concentration of economic power among businesses), having somebody in office who can protect the firm's interests is imperative. Coupled with professional politicians' commitment problem, this implies the prevalence of businessman candidates. We illustrate the results of our model by drawing upon the experience of a recent gubernatorial election in Krasnoyarskii Krai -- a large Siberian region dominated by two industrial interests, with the winner of the election the former general director of one of the two firms -- which in its particulars exemplifies a more general trend in Russian politics

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 178.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:178

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Keywords: special interest politics; businessman candidates; Russia;

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Find related papers by JEL classification:
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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Cited by:
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  1. Timothy Besley, 2005. "Political Selection and the Quality of Evidence: Evidence form South India," Working Papers id:261, esocialsciences.com. [Downloadable!]
  2. Gagliarducci, Stefano & Nannicini, Tommaso & Naticchioni, Paolo, 2008. "Outside Income and Moral Hazard: The Elusive Quest for Good Politicians," IZA Discussion Papers 3295, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2007. "Deregulation of Business," Working Papers w0097, Center for Economic and Financial Research (CEFIR). [Downloadable!]
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  4. Timothy Besley & Rohini Pande & Vijayendra Rao, 2005. "Political Selection and the Quality ofGovernment: Evidence from South India," STICERD - Development Economics Papers 44, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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