Political Alternation as a Restraint on Investing in Influence : Evidence from the Post-Communist Transition

The authors develop and implement a method for measuring the frequency of changes in power among distinct leaders and ideologically distinct parties that is comparable across political systems. The authors find that more frequent alternation in power is associated with the emergence of better governance in post communist countries. The results are consistent with the hypothesis that firms seek durable protection from the state, which implies that expected political alternation is relevant to the decision whether to invest in influence with the governing party or, alternatively, to demand institutions that apply predictable rules, with equality of treatment, regardless of the party in power.

Bibliographic Details

Main Authors:	Hoff, Karla, Milanovic, Branko, Horowitz, Shale
Language:	English
Published:	World Bank, Washington, DC 2008-10
Subjects:	ACCOUNTABILITY, ASSASSINATION, AUTHORITARIANISM, AUTHORITY, BINDING CONSTRAINT, BRIBE, BRIBERY, BRIBES, CITIZENS, CIVIL SOCIETY, COALITIONS, COLLAPSE, COLLAPSES, COMMUNISM, COMMUNIST, COMMUNIST PARTY, COMPOSITE INDICATORS, CONFIDENCE, CONSTITUENCIES, CONSTITUENTS, CONSTITUTIONALISM, CONTRACT ENFORCEMENT, CORPORATE GOVERNANCE, CORRUPT, CORRUPTION, COUNTRY DUMMIES, COUNTRY FIXED EFFECT, COUNTRY FIXED EFFECTS, CREDIT RATING, CRIMINAL, CRIMINAL INVESTIGATIONS, CULTURAL IDENTITY, DECREE, DEMOCRACIES, DEMOCRACY, DEMOCRATIC SYSTEMS, DEMOCRATIZATION, EAST EUROPEAN, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMIC REFORMS, ELECTION, ELECTIONS, ELECTORAL COMPETITION, ELECTORAL RULES, EMERGING MARKETS, FINANCIAL SUPPORT, FREE TRADE, GOOD GOVERNANCE, GOVERNANCE INDICATORS, GOVERNANCE INSTITUTIONS, GOVERNANCE MEASURE, GOVERNANCE MEASURES, GOVERNANCE OUTCOMES, GOVERNMENT ACTIONS, GOVERNMENT SERVICES, GRAND CORRUPTION, IDEOLOGIES, IMPROVING GOVERNANCE, INCOME LEVEL, INEQUALITY, INSTITUTIONAL CONSTRAINTS, INSTITUTIONAL FOUNDATIONS, INSTITUTIONAL REFORM, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL FLOWS, INTERNATIONAL MARKETS, INTERNATIONAL PEACE, JAIL, JUDICIAL DECISIONS, JUDICIARY, LABOR UNIONS, LAW INDEX, LAW INDICATOR, LAWS, LEGAL INSTITUTIONS, LEGISLATION, LEGISLATURE, LIBERALIZATION, LIBERALIZATIONS, LOCAL LEVELS, LOWER HOUSE, MACROECONOMIC POLICY, MARKET ECONOMY, MEDIA, NATIONAL LEVEL, NATIONALISM, NATURAL RESOURCE, NATURAL RESOURCES, NEW MARKET, OWNERSHIP RIGHTS, PARLIAMENT, PARLIAMENTARY DEMOCRACY, PARLIAMENTARY ELECTIONS, PATRONAGE, PER CAPITA INCOME, PETTY CORRUPTION, POLICY ISSUES, POLITICAL CHANGE, POLITICAL COMPETITION, POLITICAL CORRUPTION, POLITICAL ECONOMY, POLITICAL INSTABILITY, POLITICAL INSTITUTIONS, POLITICAL LEADERS, POLITICAL LEADERSHIP, POLITICAL MOBILIZATION, POLITICAL PARTIES, POLITICAL PARTY, POLITICAL PHILOSOPHER, POLITICAL POWER, POLITICAL POWERS, POLITICAL PROCESS, POLITICAL PROCESSES, POLITICAL REGIMES, POLITICAL RISK, POLITICAL STABILITY, POLITICAL SYSTEM, POLITICAL SYSTEMS, POLITICIAN, POLITICIANS, PREFERENTIAL, PREFERENTIAL ACCESS, PREFERENTIAL TREATMENT, PRESIDENCY, PRESIDENTS, PRIME MINISTER, PRIVATE GAIN, PRIVATE OWNERSHIP, PRIVATIZATION, PROPERTY RIGHTS, PUBLIC FUNDING, RATE OF RETURN, REGIME CHANGE, REPUBLICS, RESOURCE CURSE, RULE OF LAW, SAFETY NETS, SANCTIONS, SEPARATION OF POWERS, SOCIALISM, STATE ASSETS, STATE CAPTURE, STATE CONTROL, STATE GOVERNMENT, STATE OWNERSHIP, STRONG GOVERNANCE, TAXATION, TRANSITION COUNTRIES, TRANSITION ECONOMIES, TURNOVER, TURNOVERS, UPPER HOUSE, URBANIZATION, URBANIZATION RATE, VETO, VETO POWER, WESTERN EUROPE, WORLD DEVELOPMENT INDICATORS, WORLD POLITICS,
Online Access:	http://documents.worldbank.org/curated/en/2008/10/9911985/political-alternation-restraint-investing-influence-evidence-post-communist-transition https://hdl.handle.net/10986/6932
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