Klarita Gërxhani (University of Amsterdam, Institute for Advanced Labour Studies AIAS , Amsterdam School for Social science Research ASSR , Faculty of Economics & Econometrics FEE) Arthur Schram (University of Amsterdam, CREED, Faculty of Economics & Econometrics)
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We study the politico-economic interaction in a country in transition from a communist regime to a democratic, free market system, to wit, Albania. It is argued that the politico-economic system there is characterized by the existence of clans. Both the communists and the first democratically chosen government applied policies that favored specific clans. Moreover, a popularity function estimation shows that voters related to different clans react in a distinct way to party policies.
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