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The Value of Political Capital: Dictatorship Collaborators as Business Elites

Felipe González and Mounu Prem

No 507, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: What is the value of political capital for individuals? Towards the end of the Pinochet dictatorship in Chile, military and civilian collaborators entered the business elite, controlling the largest and most important firms in the country. Using a novel panel dataset of board members in these firms, we document a work premium for those who had previously collaborated with Pinochet. After democratization, however, collaborators were removed from boards and their compensation premium disappeared, suggesting that the value of their networks depreciated. To shed light on these findings, we study military personnel before, during, and after Pinochet and find evidence of a wage premium only during the dictatorship. We interpret these results as Pinochet favoring his collaborators while he was in power.

JEL-codes: J (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (11)

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Journal Article: The value of political capital: Dictatorship collaborators as business elites (2018) Downloads
Working Paper: The Value of Political Capital: Dictatorship Collaborators as Business Elites (2018) Downloads
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