University of Wisconsin-Madison; Center for the Study of Institutions and Development (CSID)
Higher School of Economics; Centre for Economic Policy Research (CEPR)
Paris School of Economics
June 24, 2010
American Journal of Political Science, Vol. 54, No. 3, pp. 718-736, July 2010
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.
Number of Pages in PDF File: 28
Keywords: businessman candidates, political selection, immature democracies, special interest politics, political connections
JEL Classification: D21, H11, O17
Date posted: July 20, 2006 ; Last revised: June 24, 2010
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