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Businessman Candidates

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  • Scott Gehlbach
  • Konstantin Sonin
  • Ekaterina Zhuravskaya

Abstract

Why and when do businessmen run for public office rather than rely upon other means of influence? What are the implications of their participation for public policy? We show formally that “businessman candidacy” and public policy are jointly determined by the institutional environment. When institutions that hold elected officials accountable to voters are strong, businessmen receive little preferential treatment and are disinclined to run for office. When such institutions are weak, businessmen can subvert policy irrespective of whether they hold office, but they may run for office to avoid the cost of lobbying elected officials. Evidence from Russian gubernatorial elections supports the model's predictions. Businessman candidates emerge in regions with low media freedom and government transparency, institutions that raise the cost of reneging on campaign promises. Among regions with weaker institutions, professional politicians crowd out businessmen when the rents from office are especially large.

Suggested Citation

  • Scott Gehlbach & Konstantin Sonin & Ekaterina Zhuravskaya, 2010. "Businessman Candidates," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 718-736, July.
  • Handle: RePEc:wly:amposc:v:54:y:2010:i:3:p:718-736
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    File URL: https://doi.org/10.1111/j.1540-5907.2010.00456.x
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    Cited by:

    1. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside Income and Moral Hazard: The Elusive Quest for Good Politicians," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-164, Boston University - Department of Economics.
    2. Yasushi Asako, 2015. "Partially Binding Platforms: Campaign Promises vis-à-vis Cost of Betrayal," The Japanese Economic Review, Japanese Economic Association, vol. 66(3), pages 322-353, September.
    3. Jochimsen, Beate & Thomasius, Sebastian, 2014. "The perfect finance minister: Whom to appoint as finance minister to balance the budget," European Journal of Political Economy, Elsevier, vol. 34(C), pages 390-408.
    4. Shurchkov, Olga, 2012. "New elites and their influence on entrepreneurial activity in Russia," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 240-255.
    5. Rohini Pande & Timothy Besley & Vijayendra Rao, 2005. "Political Selection and the Quality of Evidence: Evidence form South India," Working Papers id:261, eSocialSciences.
    6. Serguey Braguinsky, 2009. "Postcommunist Oligarchs in Russia: Quantitative Analysis," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 307-349, May.
    7. Braendle, Thomas & Stutzer, Alois, 2016. "Selection of public servants into politics," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 696-719.
    8. Pande, Rohini, 2008. "Understanding Political Corruption in Low Income Countries," Handbook of Development Economics, Elsevier.
    9. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2010. "Disclosure by Politicians," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 179-209, April.
    10. repec:bla:ecinqu:v:56:y:2018:i:4:p:2116-2136 is not listed on IDEAS
    11. Timothy Besley & Rohini Pande & Vijayendra Rao, 2005. "Political Selection and the Quality of Government: Evidence from South India," STICERD - Political Economy and Public Policy Paper Series 08, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    12. repec:eee:poleco:v:55:y:2018:i:c:p:433-454 is not listed on IDEAS
    13. Florian Neumeier, 2018. "Do Businessmen Make Good Governors?," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2116-2136, October.
    14. Ulrich Matter & Alois Stutzer, 2015. "The Role of Lawyer-Legislators in Shaping the Law: Evidence from Voting on Tort Reforms," Journal of Law and Economics, University of Chicago Press, vol. 58(2), pages 357-384.
    15. Jan Auerbach, 2018. "Office-Holding Premia and Representative Democracy," Discussion Papers 1802, University of Exeter, Department of Economics.
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    17. Timothy Besley, 2005. "Political Selection," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 43-60, Summer.
    18. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2007. "Deregulation of Business," Working Papers w0097, Center for Economic and Financial Research (CEFIR).
    19. repec:bla:jcmkts:v:55:y:2017:i:2:p:368-386 is not listed on IDEAS
    20. Timothy Besley & Jose G. Montalvo & Marta Reynal‐Querol, 2011. "Do Educated Leaders Matter?," Economic Journal, Royal Economic Society, vol. 121(554), pages 205-205, August.
    21. Daniel Muller & Lionel Page, 2016. "Born leaders: political selection and the relative age effect in the US Congress," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 809-829, June.
    22. repec:bla:germec:v:18:y:2017:i:1:p:22-50 is not listed on IDEAS
    23. C. Simon Fan & Chen Lin & Daniel Treisman, 2010. "Embezzlement Versus Bribery," NBER Working Papers 16542, National Bureau of Economic Research, Inc.
    24. Ilona Babenko & Viktar Fedaseyeu & Song Zhang, 2017. "Executives In Politics," BAFFI CAREFIN Working Papers 1762, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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