Policy Uncertainty in Hybrid Regimes - Evidence from Firm Level Surveys

Comparative Political Studies, Vol. 43, No. 6, June 2010

37 Pages Posted: 13 Aug 2007 Last revised: 28 Nov 2008

See all articles by Thomas Kenyon

Thomas Kenyon

United Nations Industrial Development Organization

Megumi Naoi

University of California, San Diego (UCSD) - Department of Political Science

Date Written: August 1, 2007

Abstract

Abstract: Cross-national surveys suggest that regulatory and policy uncertainty is an important constraint on investment in developing countries. Yet there has been little direct empirical investigation of the sources of this uncertainty. This paper presents evidence of an inverted U-shaped relationship between firms' perceptions of policy uncertainty and political regime type. Firms in hybrid regimes report higher levels of concern over policy uncertainty than those in either strict authoritarian regimes or liberal established democracies. We argue that the explanation lies with a combination of polarized political competition and limited access to credible information and test our theory using survey data of around 10,000 firms from the World Bank-EBRD's Business Environment and Enterprise Performance Survey (BEEPS) from 27 post-communist countries and five OECD countries. Methodologically, we propose a means of controlling for reporting and suppression bias in these surveys when an anchoring vignette is not available.

Keywords: policy uncertainty, political risk, transition economies

Suggested Citation

Kenyon, Thomas and Naoi, Megumi, Policy Uncertainty in Hybrid Regimes - Evidence from Firm Level Surveys (August 1, 2007). Comparative Political Studies, Vol. 43, No. 6, June 2010. Available at SSRN: https://ssrn.com/abstract=1005420 or http://dx.doi.org/10.2139/ssrn.1005420

Thomas Kenyon (Contact Author)

United Nations Industrial Development Organization ( email )

Vienna International Centre
Vienna, DC
Austria

Megumi Naoi

University of California, San Diego (UCSD) - Department of Political Science ( email )

9500 Gilman Drive
Code 0521
La Jolla, CA 92093-0521
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
175
Abstract Views
1,801
rank
177,799
PlumX Metrics