Political Liberalization and State Capture by Business Interests

Добавить в календарь 2023-03-30 18:00:00 2023-06-05 16:55:13 Городской экономический семинар “Political Liberalization and State Capture by Business Interests” Description Онлайн Department of Economics info@eusp.org Europe/Moscow public
Department of Economics

30 марта в 18:00 Jean-Philippe PLATTEAU  (Université de Namur) представит статью “Political Liberalization and State Capture by Business Interests”.

A widespread view holds that political liberalization should help improve a country's governance. Motivated by observations from three African countries, we question this view by lifting the implicit assumption that the state is immune to the influence of wealthy business leaders. We explore the relationship between political competition and state capture when these leaders can make campaign donations to political candidates and thereby obtain access to the rents of political power.

We find that, when the business sector is unified, the risk of state capture increases with the number of candidates, yet only up to a point beyond which it starts to decrease. If the amount of benefits derived from capture is large enough, however, the relationship becomes unambiguously positive. When the business sector is fragmented, however, two different situations need to be distinguished : in one of them, the level of commitment by politicians is strong or the gains obtained through state capture by business firms are highly rival while in the other situation, the opposite characteristics are observed. In the former case, state capture is more likely to increase with economic liberalization. In addition, when a coalition of corruptible candidates can be built at the initiative of the oligarchs, an unambiguously positive relationship between political competition and capture is obtained regardless of the magnitude of state rents. Important policy implications of these results are discussed in the paper.

Рабочий язык семинара: английский.

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