Businessman Candidates

43 Pages Posted: 7 Jan 2007

See all articles by Scott Gehlbach

Scott Gehlbach

University of Wisconsin-Madison

Konstantin Sonin

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; Higher School of Economics; Centre for Economic Policy Research (CEPR)

Ekaterina Zhuravskaya

Paris School of Economics (PSE)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2006

Abstract

In immature democracies, businessmen run for public office to gain direct control over policy; in mature democracies they typically rely on other means of influence. We develop a simple model to show that businessmen run for office only when two conditions hold. First, as in many immature democracies, institutions that make reneging on campaign promises costly must be poorly developed. In such environments, office holders have monopoly power that can be used to extract rents, and businessmen run to capture those rents. Second, the returns to businessmen from policy influence must not be too large, as otherwise high rents from holding office draw professional politicians into the race, crowding out businessmen candidates. Analysis of data on Russian gubernatorial elections supports these predictions. Businessman candidates are less likely 1) in regions with high media freedom and government transparency, institutions that raise the cost of reneging on campaign promises, and 2) in regions where returns to policy influence (measured by regional resource abundance) are large, but only where media are unfree and government nontransparent.

Keywords: Political connections, businessman candidates, immature democracy, media freedom, government transparency, strength of political parties

JEL Classification: D72

Suggested Citation

Gehlbach, Scott and Sonin, Konstantin and Zhuravskaya, Ekaterina, Businessman Candidates (December 2006). CEPR Discussion Paper No. 5985. Available at SSRN: https://ssrn.com/abstract=955349

Scott Gehlbach

University of Wisconsin-Madison ( email )

1050 Bascom Mall
Madison, WI 53706
United States
608-263-2391 (Phone)

Konstantin Sonin (Contact Author)

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Higher School of Economics ( email )

20 Myasnitskaya street
Moscow, 119017
Russia

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ekaterina Zhuravskaya

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Register to save articles to
your library

Register

Paper statistics

Downloads
15
Abstract Views
1,060
PlumX Metrics