Do Democracies Breed Rent-Seeking Behavior?
AbstractUsing objective institutional historical data we test the link between extent, duration, and transparency in democracies and rent-seeking behavior using time-series and panel data approaches. In this paper we focus on the case of Uruguay, an ethnically homogeneous country. We find three main results. First, democratic regimes are negatively linked with rent-seeking actions. Second, the longer the duration of democracy, the less rent-seeking in a society. Third, legislation enacted more transparently is negatively correlated with rent-seeking behavior. Our results are robust to the use of different econometric methods and basic robustness tests and are consistent with prevailing theory.
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Bibliographic InfoPaper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4415.
Date of creation: Jun 2005
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