Tunrover in Power as a Restraint on Investing in Influence: Evidence from the Postcommunist Transition (original) (raw)

2010, Economics & Politics

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 in the postcommunist countries, more frequent changes in power in the early years of transition are associated with better governance in the later years. The results are consistent with the hypothesis that more frequent turnover in power lowers the returns to firms seeking to buy political influence: i.e. that government turnover serves as a restraint on investing in influence regardless of the ideology of the government. 1 in his survey of the literature on institutions and growth, wryly concludes: ''Interpreted literally as recipes or policy recommendations, these [results] require a less-developed country to use plate tectonics to move itself to a more favorable location, or to turn the clock back and invite British colonizers, of course cleaning up the local disease environment and getting rid of mineral resources and resources suitable for plantation agriculture beforehand. As a practical matter, these findings are merely telling countries to accept their fate' ' (pp. 4-5). Volume ]]] ]] 2010 No. ]] ECPO 365 2 Dixit et al. study a different channel through which political turnover can improve the quality of governance. In their model, two parties expect to alternate in power indefinitely, and this prospect makes it in the self-interest of each party to share wealth broadly rather than privileging its own constituents. 2 MILANOVIC ET AL.

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