Crony Capitalism and the Targeting of Violence: Labor Repression During Argentina's Last Dictatorship

56 Pages Posted: 22 Nov 2016

See all articles by Esteban F. Klor

Esteban F. Klor

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR)

Sebastian M. Saiegh

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

Shanker Satyanath

New York University (NYU) - Wilf Family Department of Politics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2016

Abstract

Well-known dictatorships have justified massive human rights violations on the grounds that they were aimed at attacking crony capitalism (governance based on favoring firms that are connected to the regime). So far, however, there is no systematic study examining whether this justification should be believed. We address this gap in the literature in the context of one of the best-known episodes of human rights violations in modern history, the repression following the coup in Argentina on 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 an increase of 2 to 3 times in the number of firm level union representatives arrested and/or disappeared. 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 particularly 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 also 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: Argentina, Human Rights Violations, Labor Repression, Political Connections

JEL Classification: D73, D74, J52

Suggested Citation

Klor, Esteban F. and Saiegh, Sebastian M. and Satyanath, Shanker, Crony Capitalism and the Targeting of Violence: Labor Repression During Argentina's Last Dictatorship (November 2016). CEPR Discussion Paper No. DP11650, Available at SSRN: https://ssrn.com/abstract=2873547

Esteban F. Klor (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3143 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: http://economics.huji.ac.il/facultye/klor/klor.htm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Sebastian M. Saiegh

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

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

Shanker Satyanath

New York University (NYU) - Wilf Family Department of Politics ( email )

715 Broadway
New York, NY 10003
United States

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