Political Alternation as a Restraint on Investing in Influence: Evidence from the Post-Communist Transition
World Bank - Development Research Group (DECRG); University of Maryland
World Bank - Development Economics Group (DEC)
University of Wisconsin - Milwaukee
October 1, 2008
World Bank Policy Research Working Paper No. 4747
The authors develop and implement a method for measuring the frequency of changes in power among distinct leaders and ideologically distinct parties that is comparable across political systems. The authors find that more frequent alternation in power is associated with the emergence of better governance in post communist countries. The results are consistent with the hypothesis that firms seek durable protection from the state, which implies that expected political alternation is relevant to the decision whether to invest in influence with the governing party or, alternatively, to demand institutions that apply predictable rules, with equality of treatment, regardless of the party in power.
Number of Pages in PDF File: 44
Keywords: National Governance, Governance Indicators, Public Sector Corruption & Anticorruption Measures, Parliamentary Government, Emerging Marketsworking papers series
Date posted: October 8, 2008
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