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

Branko Milanovic, Karla Hoff and Shale Horowitz

MPRA Paper from University Library of Munich, Germany

Abstract: We 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. We find that more frequent alternation in power is associated with the emergence of better governance in postcommunist 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.

Keywords: Governance; transition; political alternation (search for similar items in EconPapers)
JEL-codes: P3 P37 (search for similar items in EconPapers)
Date: 2008-08-30
New Economics Papers: this item is included in nep-pol and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Political alternation as a restraint on investing in influence: evidence from the post-communist transition (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11829

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