Why do businessmen run for public office?

In Italy, on my way back home, these are the papers one’s thoughts turn to:

In immature democracies, businessmen run for public office to gain direct control over policy; in mature democracies they typically rely on other means of influence.  We develop a simple model to show that businessmen run for office only when two conditions hold.  First, as in many immature democracies, institutions that make reneging on campaign promises costly must be poorly developed.  In such environments, office holders have monopoly power that can be used to extract rents, and businessmen run to capture those rents.  Second, the returns to businessmen from policy influence must not be too large, as otherwise high rents from holding office draw professional politicians into the race, crowding out businessmen candidates.  Analysis of data on Russian gubernatorial elections supports these predictions.  Businessman candidates are less likely 1) in regions with high media freedom and government transparency, institutions that raise the cost of reneging on campaign promises, and 2) in regions where returns to policy influence measured by regional resource abundance are large, but only where media are unfree and government nontransparent.

Here is the paper.  From the same seminar series, here is a Jim Fearon paper on how democracy minimizes the cost of rebellion.

Comments

i believe it has also something to do with capturing information rents. by being a part of the legislatures businessmen can get advance warning of materially important legislation and assess first-hand it's chances of ratification thus relying less on broker politicians whose interests(even after bieng bribed) might lie elsewhere. there is way to test all this- are businessmen from highly taxed or protected industries more likely to run for office?

also the claim in the paper that excess returns attract more professioanl politicians seems confusing. it suggests that the marginal value of office accrues maily to politicians than businessmen.

Businessmen or lawyers? I'll take the businessmen!

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