State Capture Analysis : How to Quantitatively Analyze the Regulatory Abuse by Business-State Relationships
Abundant qualitative evidence reveals how public and private actors abuse regulations to seek rents, impede reforms, and distort the economy. However, empirical evidence of such behavior, including its economic costs, remains limited. For that reas...
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Language: | English |
Published: |
World Bank, Washington, DC
2019
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Online Access: | http://documents.worldbank.org/curated/en/785311576571172286/State-Capture-Analysis-How-to-Quantitatively-Analyze-the-Regulatory-Abuse-by-Business-State-Relationships http://hdl.handle.net/10986/33094 |
Summary: | Abundant qualitative evidence reveals
how public and private actors abuse regulations to seek
rents, impede reforms, and distort the economy. However,
empirical evidence of such behavior, including its economic
costs, remains limited. For that reason, the objective of
this paper is to help practitioners who seek to
quantitatively analyze state capture make better use of
experience, methodologies, and potential data sources. Based
on a comprehensive body of existing empirical studies, it
provides guidance to analyze state capture and its impact on
the economy. Chapter one discusses the concept of state
capture and its relevance for economic development. Chapter
two presents the main avenues of how policies have been
captured and the empirical evidence of their implications.
Chapter three provides an analytical framework for state
capture analysis and discusses various applied approaches.
The chapter is organized into three components required for
the assessment: (i) evidence of political connectedness,
which discusses data collection methods and methodologies of
analyzing political connections; (ii) evidence of de jure
and de facto mechanisms, through which firms receive policy
favors; and (iii) firm-level indicators to measure
performance differences between politically connected and
nonconnected firms. Finally, two annexes provide a list of
potential data sources and an extensive compilation of
studies that have empirically examined state capture. |
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