Cronyism in State Violence: Evidence from Labor Repression During Argentina’s Last Dictatorship
63 Pages Posted: 15 Oct 2016 Last revised: 18 Sep 2017
Date Written: September 13, 2017
We study whether crony governance can extend beyond economic policy to the targeting of state violence against citizens. We do so with a micro-analysis of state repression by the Argentine military junta that took power in March 24, 1976. Specifically, we examine the logic driving the choice of firm level union representatives who were subjected to violence following the coup. Using an original dataset assembled and digitized by us, we find that political, business and social connections to the regime are associated with a doubling of violence against firm level union representatives. This is the case even after controlling for a battery of firms’ characteristics that capture alternative explanations for the targeting of violence. The effect is pronounced in privately owned (as opposed to state-owned) firms, suggesting that the correlation is driven by cronyism for financial gain rather than ideology or information transmission. We show that connected firms benefited from violence against union representatives by subsequently having less strikes and a higher market valuation. Our findings highlight the pervasiveness of ties to the government, even in cases where one of the main stated goals of the regime is to curb cronyism.
Keywords: Political Connections, Labor Repression, Human Rights Violations, Argentina
JEL Classification: D73, D74, J52, N46
Suggested Citation: Suggested Citation