Politics for Profit: Business, Elections, and Policymaking in Russia

Description

Businesspeople run for and win elected office around the world, with roughly one-third of members of parliament and numerous heads of states coming directly from the private sector. Yet we know little about why these politicians choose to leave the private sector and what they actually do while in government. In Politics for Profit, David Szakonyi brings to bear sweeping quantitative and qualitative evidence from Putin-era Russia to shed light on why businesspeople contest elections and what the consequences are for their firms and for society when they win. The book develops an original theory of businessperson candidacy as a type of corporate political activity undertaken in response to both economic competition and weak political parties. Szakonyi's evidence then shows that businesspeople help their firms reap huge gains in revenue and profitability while prioritizing investments in public infrastructure over human capital. The book finally evaluates policies for combatting political corruption. Politics for Profit: Business, Elections, and Policymaking in Russia Contents List of Figures List of Tables Acknowledgments Introduction Businesspeople in Elected Office Worldwide Businessperson Candidacy as Non-Market Strategy Puzzle and Theoretical Framework Argument Testing the Argument Deciding How to Run Businessperson Rent-Seeking and Policymaking Firm-Level Benefits from Businessperson Candidacy Businesspeople as Policymakers The Case of Russia Contributions to the Literature 1 A Theory of Businessperson Candidacy 1.1 Indirect Strategies: Political Access through Intermediaries 1.1.1 Campaign Contributions 1.1.2 Lobbying 1.2 Direct Strategies 1.2.1 Bringing Politicians On Board 1.2.2 Becoming Bureaucrats 1.2.3 Businessperson Candidacy How Businessperson Candidacy Helps Firms Deputy Requests Financial and Opportunity Costs of Running for Office 1.3 How Firms Choose Between Indirect and Direct Strategies 1.3.1 Why do Politicians Shirk? 1.3.2 The Drawbacks of Conventional Solutions 1.4 Businessperson Candidacy Solves the Commitment Problem 1.4.1 Economic Competition and Political Rivalry 1.4.2 The Constraining Effects of Strong Political Parties 1.4.3 Campaign Costs and Candidate Entry 1.4.4 An Ability to Pay 1.5 Alternative Explanations for Businessperson Candidacy 1.5.1 Quality of Democracy 1.5.2 Collective Action by Trade Associations, Alliances, and Business-Led Political Parties 1.5.3 Personal Characteristics of Office-Seekers 1.6 Discussion and Concluding Remarks 2 Identifying Businesspeople Who Run for Office 2.1 Defining Businessperson Candidacy 2.1.1 A Brief History of Businesspeople in Russian Politics Why Focus on Regional Legislatures? 2.1.2 Regional Legislative Elections 2.1.3 Connecting Candidates with Firms 2.1.4 Descriptive Statistics: Candidate Level 2.1.5 Descriptive Statistics: Firm Level The Case of State-Owned Enterprises 2.2 Discussion and Concluding Remarks 3 Economic Competition, Weak Parties, and Businessperson Candidacy 3.1 Determinants of Businessperson Candidacy: Firm Registration Data 3.1.1 Variable Measurement 3.1.2 Empirical Strategy 3.1.3 Firm-Level Empirical Results 3.1.4 Region-Level Empirical Results 3.2 Evidence from a Firm Survey 3.3 Qualitative Data 3.4 Discussion and Concluding Remarks 4 Choosing Ballots, Parties, and Delegates 4.1 Choosing a Ballot 4.1.1 How Businesspeople Choose between Ballots 4.1.2 Data and Empirical Strategy 4.1.3 Empirical Results 4.2 Choosing a Party 4.2.1 Party Membership in Putin-Era Russia 4.2.2 How Businesspeople Choose Between Parties 4.2.3 Data and Empirical Strategy 4.2.4 Empirical Results 4.2.5 Do Parties Coordinate Sectoral Interests? 4.3 Selecting a Firm Representative 4.3.1 Data and Empirical Strategy 4.3.2 Empirical Results 4.4 Discussion and Concluding Remarks 5 Firm-Level Returns from Businessperson Candidacy 5.1 Returns to Corporate Political Activity 5.2 Data and Research Design 5.2.1 Data Description 5.2.2 Regression Discontinuity Design 5.2.3 Balance Checks 5.3 RDD Results 5.4 Causal Mechanisms 5.5 Heterogeneous Treatment Effects 5.6 Discussion and Concluding Remarks 6 Businesspeople as Policymakers 6.1 Demographic Determinants of Policymaking 6.1.1 Adopting Pro-Business Policies Improving Government Efficiency 6.2 Data and Research Design 6.2.1 Measuring Private Sector Experience 6.2.2 Outcome Data 6.2.3 Research Design and Balance Checks 6.3 Empirical Results 6.3.1 Robustness: Spending by Regional Legislatures 6.4 Concluding Remarks 7 Conclusion and Policy Recommendations 7.1 Taking the Arguments to the Road 7.2 Designing Effective Policy 7.2.1 Cooling-Off versus Moonlighting 7.2.2 Divesting Assets 7.2.3 Mandating Transparency and Calling Citizens to Action Appendix A Data Sources A.1 Introduction to SPARK Database A.2 Description of Algorithm A.3 Data Quality and Limitations B Chapter 2: Descriptive Statistics B.1 Descriptive Statistics C Chapter 3: Robustness Checks C.1 Firm Registration Data: Extensions C.2 Candidate Data D Chapter 4: Robustness Checks D.1 Party Choice: All Candidates E Chapter 5: Robustness Checks E.1 Digging into the Democracy Mechanism F Chapter 6: Descriptive Statistics and Robustness Checks F.1 Descriptive Statistics: Overview of Regional and Municipal Spending F.2 Municipality Level: Other Outcome Variables F.3 Region Level: Other Outcome Variables F.4 Public Opinion Data on Businesspeople’s Preferences: Life in Transition Survey Bibliography Index Back Matter