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Businessman Candidates

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  • Konstantin Sonin
  • Scott Gehlbach

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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Bibliographic Info

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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Citations

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Cited by:
  1. Yakovlev, Evgeny & Zhuravskaya, Ekaterina, 2007. "Deregulation of Business," CEPR Discussion Papers 6610, C.E.P.R. Discussion Papers.
  2. Rohini Pande & Timothy Besley & Vijayendra Rao, 2005. "Political Selection and the Quality of Evidence: Evidence form South India," Working Papers id:261, eSocialSciences.
  3. Timothy Besley & Jose G. Montalvo & Marta Reynal‐Querol, 2011. "Do Educated Leaders Matter?," Economic Journal, Royal Economic Society, vol. 121(554), pages F205-, 08.
  4. Thomas Braendle, 2013. "Do Institutions Affect Citizens' Selection into Politics?," Working papers 2013/04, Faculty of Business and Economics - University of Basel.
  5. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside income and moral hazard : the elusive quest for good politicians," Economics Working Papers we073218, Universidad Carlos III, Departamento de Economía.
  6. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2009. "Disclosure by Politicians," NBER Working Papers 14703, National Bureau of Economic Research, Inc.
  7. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," CEPR Discussion Papers 6273, C.E.P.R. Discussion Papers.
  8. C. Simon Fan & Chen Lin & Daniel Treisman, 2010. "Embezzlement Versus Bribery," NBER Working Papers 16542, National Bureau of Economic Research, Inc.
  9. Besley, Timothy J. & Pande, Rohini & Rao, Vijayendra, 2005. "Political Selection and the Quality of Government: Evidence from South India," CEPR Discussion Papers 5201, C.E.P.R. Discussion Papers.
  10. Timothy Besley, 2005. "Political Selection," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 43-60, Summer.
  11. Serguey Braguinsky, 2009. "Postcommunist Oligarchs in Russia: Quantitative Analysis," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 307-349, 05.
  12. Ulrich Matter & Alois Stutzer, 2013. "Do Lawyer-Legislators Protect Their Business? Evidence from Voting Behavior on Tort Reforms," Working papers 2013/09, Faculty of Business and Economics - University of Basel.
  13. Beate R. Jochimsen & Sebastian Thomasius, 2012. "The Perfect Finance Minister: Whom to Appoint as Finance Minister to Balance the Budget?," Discussion Papers of DIW Berlin 1188, DIW Berlin, German Institute for Economic Research.
  14. Thomas Braendle & Alois Stutzer, 2011. "Selection of Public Servants into Politics," Working papers 2011/06, Faculty of Business and Economics - University of Basel.

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