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Do Democracies Breed Rent-Seeking Behavior?

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Author Info
César Calderón
Alberto Chong ()

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Abstract

Using 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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Paper provided by Inter-American Development Bank, Research Department in its series RES Working Papers with number 4415.

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Date of creation: Jun 2005
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Handle: RePEc:idb:wpaper:4415

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Alberto Chong & Luisa Zanforlin, 2001. "Inward-Looking Policies, Institutions, Autocrats, and Economic Growth in Latin America: An Empirical Exploration," RES Working Papers 4255, Inter-American Development Bank, Research Department. [Downloadable!]
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  2. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August. [Downloadable!] (restricted)
  3. Keefer, Philip, 2004. "Elections, special interests, and the fiscal costs of financial crisis," Policy Research Working Paper Series 3439, The World Bank. [Downloadable!]
  4. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  5. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
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  6. Marianne Bertrand & Sendhil Mullainathan, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May. [Downloadable!] (restricted)
  7. Raymond Fisman, 2001. "Estimating the Value of Political Connections," American Economic Review, American Economic Association, vol. 91(4), pages 1095-1102, September. [Downloadable!] (restricted)
  8. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Blackwell Publishing, vol. 12(1), pages 69-81, 03. [Downloadable!] (restricted)
  9. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Blackwell Publishing, vol. 12(1), pages 1-31, 03. [Downloadable!] (restricted)
  10. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December. [Downloadable!] (restricted)
  11. Baldwin, Robert E, 1989. "The Political Economy of Trade Policy," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 119-35, Fall. [Downloadable!] (restricted)
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  1. Marco Pani, 2009. "Hold Your Nose and Vote: Why Do Some Democracies Tolerate Corruption?," IMF Working Papers 09/83, International Monetary Fund. [Downloadable!]
  2. César Calderón & Alberto Chong, 2006. "Rent Seeking and Democracy in Latin America: What Drives What?," RES Working Papers 4435, Inter-American Development Bank, Research Department. [Downloadable!]
  3. César Calderón & Alberto Chong, 2006. "Búsqueda de rentas y democracia en América Latina: ¿Qué impulsa a qué?," RES Working Papers 4436, Inter-American Development Bank, Research Department. [Downloadable!]
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This page was last updated on 2009-12-5.

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