Unbundling the Relationship between Authoritarian Legislatures and Political Risk

Unbundling the Relationship between Authoritarian Legislatures and Political Risk. British Journal of Political Science, available on CJO2013. doi:10.1017/S0007123412000774.

58 Pages Posted: 30 Sep 2013

See all articles by Nathan M. Jensen

Nathan M. Jensen

Washington University in St. Louis - Department of Political Science

Edmund J. Malesky

Duke University, Political Science

Stephen J. Weymouth

Georgetown University - Department of Strategy/Economics/Ethics/Public Policy

Date Written: September 30, 2013

Abstract

A strong statistical association between legislative opposition in authoritarian regimes and investment has been interpreted as evidence that authoritarian legislatures constrain executive decisions and reduce the threat of expropriation. Although the empirical relationship is robust, scholars have not provided systematic evidence that authoritarian parliaments are able to restrain the actions of state leaders, reverse activities they disagree with, or remove authoritarian leaders who violate the implied power-sharing arrangement. This article shows that authoritarian legislatures, by providing a forum for horse trading between private actors, are better at generating corporate governance legislation that protects investors from corporate insiders than they are at preventing expropriation by governments. The statistical analysis reveals that the strength of authoritarian legislatures is associated with corporate governance rules and not expropriation risk.

Keywords: authoritarian institutions, legislatures, investment, property rights, contract risk

JEL Classification: L5, N2

Suggested Citation

Jensen, Nathan M. and Malesky, Edmund J. and Weymouth, Stephen J., Unbundling the Relationship between Authoritarian Legislatures and Political Risk (September 30, 2013). Unbundling the Relationship between Authoritarian Legislatures and Political Risk. British Journal of Political Science, available on CJO2013. doi:10.1017/S0007123412000774. . Available at SSRN: https://ssrn.com/abstract=2333300

Nathan M. Jensen

Washington University in St. Louis - Department of Political Science ( email )

219 Eliot Hall
St. Louis, MO 63130
United States

Edmund J. Malesky (Contact Author)

Duke University, Political Science ( email )

140 Science Drive (Gross Hall), 2nd floor
Duke University Mailcode: 90204
Durham, NC 27708-0204
United States

Stephen J. Weymouth

Georgetown University - Department of Strategy/Economics/Ethics/Public Policy ( email )

Washington, DC 20057
United States

HOME PAGE: http://faculty.msb.edu/sw439/

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