21. Political Alternation, Regardless of Ideology, Diminishes Influence Buying: Lessons from Transitions in Former Communist States
- Author:
- Karla Hoff, Shale Horowitz, and Branko Milanovic
- Publication Date:
- 01-2005
- Content Type:
- Policy Brief
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- The Relationship between Alternation in Power and Governance: In many countries, for many firms, it is more profitable to pay off influential politicians to obtain property rights protection à la carte than to rely on existing rules of the game, or to support new institutions that would provide general protection of property rights. This is particularly likely to be the case in the early stages of economic liberalization and the transition to democracy, when state institutions and legal systems are too weak to check executive power, legal boundaries on corruption are not well-defined, and institutions to protect private property rights may be undeveloped. What factors can make influence buying less profitable? The most direct way to break the grip on state power of private interests is through the alternation of officeholders with new political players. Businesses often have “dedicated” relationships with specific political parties or politicians, but if “their” party or leader loses power, businesses' investments in influence may be wasted, since the new officeholders will not be beholden to them and may even punish them. It is true that when businesses expect political turnover, they may respond by trying to influence the entire political spectrum of parties. But attempting to influence all political players is prohibitively costly if there are many parties with widely different political ideologies. In that case, the most successful strategy for influence seekers would be to accept more transparent and equitable rules of competition and checks on arbitrary state action—a rule of law.
- Topic:
- Conflict Resolution and Government
- Political Geography:
- Eastern Europe