Journal Article

Unbundling the Relationship between Authoritarian Legislatures and Political Risk

Jensen, Nathan M., Weymouth, Stephen, Malesky, Edmund

2014

Overview

A strong statistical association between legislative opposition in authoritarian regimes and investment has been interpreted as evidence that authoritarian legislatures constrain executive decisions and reduce the threat of expropriation. Although the empirical relationship is robust, scholars have not provided systematic evidence that authoritarian parliaments are able to restrain the actions of state leaders, reverse activities they disagree with, or remove authoritarian leaders who violate the implied power-sharing arrangement. This article shows that authoritarian legislatures, by providing a forum for horse trading between private actors, are better at generating corporate governance legislation that protects investors from corporate insiders than they are at preventing expropriation by governments. The statistical analysis reveals that the strength of authoritarian legislatures is associated with corporate governance rules and not expropriation risk.

• Publisher: Cambridge University Press
• Subject: Authoritarian regimes / Authoritarianism / Authoritarianism (Political Ideology) / Cooperation / Corporate governance / Dictators / Economic growth / Economic summit conferences / Expropriation / Governance / Government / Intellectuals / Investment / Investors / Legislation / Legislative Bodies / Legislatures / Minority shareholders / Natural resources / Parliament / Parliaments / Political leadership / Political parties / Political risk / Political science / Political systems / Power-sharing / Property rights / Quantitative analysis / Quantitative Methods / Risk / State legislatures / Statistical analysis / Stockholders