IDEAS home Printed from https://ideas.repec.org/a/bla/kyklos/v67y2014i2p156-176.html
   My bibliography  Save this article

Crony Capitalism: Rent Seeking, Institutions and Ideology

Author

Listed:
  • Paul Dragos Aligica
  • Vlad Tarko

Abstract

type="main"> This paper elaborates the notion of “crony capitalism” and advances an innovative approach to the analysis of the phenomenon in case, seen as a type of rent-seeking society. The argument leads to a pioneering attempt to elaborate an original theory of crony capitalism as a sui generis system and with that end in view it combines three complementary perspectives: microeconomics (dealing with the basic economics of rent-seeking), institutional or structural (dealing with the specific structures and configurations of institutions, policies and processes via which rent seeking gets materialized), and ideological (dealing with the ideas, rhetoric, beliefs, doctrines and other forms of legitimization and justification of the specific policies and institutions). The paper identifies significant functional differences between crony capitalism in high-income and developing countries and advances a novel interpretation of the special nature of crony capitalism by focusing on the distinctive features of its ideological component.

Suggested Citation

  • Paul Dragos Aligica & Vlad Tarko, 2014. "Crony Capitalism: Rent Seeking, Institutions and Ideology," Kyklos, Wiley Blackwell, vol. 67(2), pages 156-176, May.
    • Handle: RePEc:bla:kyklos:v:67:y:2014:i:2:p:156-176
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/kykl.12048
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Margaret Canovan, 1999. "Trust the People! Populism and the Two Faces of Democracy," Political Studies, Political Studies Association, vol. 47(1), pages 2-16, March.
    2. Mazumdar, Surajit, 2008. "Crony Capitalism and India: Before and After Liberalization," MPRA Paper 19627, University Library of Munich, Germany.
    3. Axel Dreher & Friedrich Schneider, 2010. "Corruption and the shadow economy: an empirical analysis," Public Choice, Springer, vol. 144(1), pages 215-238, July.
    4. White,Lawrence H., 2012. "The Clash of Economic Ideas," Cambridge Books, Cambridge University Press, number 9781107012424, October.
    5. Robert D. Tollison, 1982. "Rent Seeking: A Survey," Kyklos, Wiley Blackwell, vol. 35(4), pages 575-602, November.
    6. Harstad, Bård & Svensson, Jakob, 2011. "Bribes, Lobbying, and Development," American Political Science Review, Cambridge University Press, vol. 105(1), pages 46-63, February.
    7. Anderson, Gary M & Boettke, Peter J, 1997. "Soviet Venality: A Rent-Seeking Model of the Communist State," Public Choice, Springer, vol. 93(1-2), pages 37-53, October.
    8. Peter Li, 2009. "The Duality of Crony Corruption in Economic Transition: Toward an Integrated Framework," Journal of Business Ethics, Springer, vol. 85(1), pages 41-55, March.
    9. Andrei Shleifer & Robert Vishny, 1992. "Pervasive Shortages under Socialism," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 237-246, Summer.
    10. Georgy Egorov & Konstantin Sonin, 2013. "A Political Theory of Populism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 771-805.
    11. Caplan, Bryan, 2003. "The idea trap: the political economy of growth divergence," European Journal of Political Economy, Elsevier, vol. 19(2), pages 183-203, June.
    12. Gordon Tullock, 2005. "Public Goods, Redistribution and Rent Seeking," Books, Edward Elgar Publishing, number 3292.
    13. Levy, David M. & Peart, Sandra J., 2011. "Soviet growth and American textbooks: An endogenous past," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 110-125, April.
    14. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    15. Naresh Khatri & Eric W K Tsang & Thomas M Begley, 2006. "Cronyism: a cross-cultural analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(1), pages 61-75, January.
    16. Levy, David M, 1990. "The Bias in Centrally Planned Prices," Public Choice, Springer, vol. 67(3), pages 213-226, December.
    17. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    18. repec:bla:kyklos:v:54:y:2001:i:4:p:509-31 is not listed on IDEAS
    19. Bryan Caplan, 2007. "Introduction to The Myth of the Rational Voter: Why Democracies Choose Bad Policies," Introductory Chapters, in: The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Princeton University Press.
    20. Paul Aligica & Vlad Tarko, 2012. "State capitalism and the rent-seeking conjecture," Constitutional Political Economy, Springer, vol. 23(4), pages 357-379, December.
    21. Bryan Caplan, 2001. "Rational Ignorance versus Rational Irrationality," Kyklos, Wiley Blackwell, vol. 54(1), pages 3-26, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kobil Ruziev & Don Webber, 2017. "SMEs access to formal finance in post-communist economies: Do institutional structure and political connectedness matter?," Working Papers 20171701, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    2. Christopher Coyne & Lotta Moberg, 2015. "The political economy of state-provided targeted benefits," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 337-356, September.
    3. René Ruske, 2015. "Does Economics Make Politicians Corrupt? Empirical Evidence from the United States Congress," Kyklos, Wiley Blackwell, vol. 68(2), pages 240-254, May.
    4. Guilherme Fowler A. Monteiro & Bruno Varella Miranda, 2023. "Disentangling the role of the institutional environment in the ownership competence framework: A comment on Foss et al. (2021)," Strategic Management Journal, Wiley Blackwell, vol. 44(8), pages 1939-1954, August.
    5. Kopp, Thomas & Nabernegg, Markus, 2022. "Inequality and Environmental Impact – Can the Two Be Reduced Jointly?," Ecological Economics, Elsevier, vol. 201(C).
    6. Pellegrini Lorenzo & Luca Tasciotti, 2019. "Corruption: Public and Private," Working Papers 220, Department of Economics, SOAS University of London, UK.
    7. Björn Kauder & Niklas Potrafke, 2016. "Supermajorities and Political Rent Extraction," Kyklos, Wiley Blackwell, vol. 69(1), pages 65-81, February.
    8. Seung Ginny Choi & Virgil Henry Storr, 2019. "A culture of rent seeking," Public Choice, Springer, vol. 181(1), pages 101-126, October.
    9. Randall G. Holcombe, 2019. "Transitional gains and rent extraction," Public Choice, Springer, vol. 181(1), pages 127-139, October.
    10. Ružica Šimić Banović, 2019. "Uhljeb – a post-socialist homo croaticus: a personification of the economy of favours in Croatia?," Post-Communist Economies, Taylor & Francis Journals, vol. 31(3), pages 279-300, May.
    11. Matthew D. Mitchell, 2019. "Uncontestable favoritism," Public Choice, Springer, vol. 181(1), pages 167-190, October.
    12. Sękowski, Stefan, 2021. "The pros and cons of rent-seeking: Political rent in various research paradigms," Studia z Polityki Publicznej / Public Policy Studies, Warsaw School of Economics, vol. 8(2), pages 1-17, July.
    13. Paul Dragos Aligica & Vlad Tarko, 2015. "Crony Capitalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(03), pages 27-32, October.
    14. Paul Dragos Aligica & Vlad Tarko, 2015. "Crony Capitalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 27-32, October.
    15. Mohamed Ismail Sabry, 2022. "Arab-German Trade and Institutions: The Effect of Good Governance on Arab Exports to Germany," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2400-2437, October.
    16. Emilio Ocampo, 2019. "The Economic Analysis of Populism. A Selective Review of the Literature," CEMA Working Papers: Serie Documentos de Trabajo. 694, Universidad del CEMA.
    17. Marcus Matthias Keupp, 2021. "Institutions and Armed Forces," Springer Books, in: Defense Economics, chapter 0, pages 23-65, Springer.
    18. repec:ces:ifodic:v:13:y:2015:i:3:p:19172605 is not listed on IDEAS
    19. John Garen, 2020. "The Allocation and Exchange of Property Rights as a Way to Understand Comparative Economic Systems and Managerial Economics," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 35(Winter 20), pages 43-59.
    20. Mario Menegatti, 2021. "Risk aversion in two-period rent-seeking games," Public Choice, Springer, vol. 188(1), pages 269-287, July.
    21. Vlad Tarko & Andrew Farrant, 2019. "The efficiency of regulatory arbitrage," Public Choice, Springer, vol. 181(1), pages 141-166, October.
    22. Abel Polese & Ignacio Fradejas-García & Ružica Šimić Banović & Vlatka Škokić & Tanel Kerikmäe & José Luis Molina & Mirela Alpeza & Miranda J. Lubbers & Alberica Camerani, 2022. "Labour Mobility and Informality: Romanian Migrants in Spain and Ethnic Entrepreneurs in Croatia," Politics and Governance, Cogitatio Press, vol. 10(2), pages 279-292.
    23. Zhi Wang & Miao Yu, 2022. "Political embeddedness and firms' growth," Kyklos, Wiley Blackwell, vol. 75(1), pages 127-153, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vlad Tarko, 2020. "Understanding post-communist transitions: the relevance of Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(1), pages 163-186, March.
    2. Ladislava Grochova & Tomas Otahal, 2011. "Corruption, Rule of Law, and Economic Efficiency: Selected Anecdotic Evidence of Bureaucratic Corruption from the Czech and Slovak Republics," MENDELU Working Papers in Business and Economics 2011-13, Mendel University in Brno, Faculty of Business and Economics.
    3. Paul Aligica & Vlad Tarko, 2012. "State capitalism and the rent-seeking conjecture," Constitutional Political Economy, Springer, vol. 23(4), pages 357-379, December.
    4. Vlad Tarko, 2015. "The role of ideas in political economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(1), pages 17-39, March.
    5. Arye L. Hillman & Heinrich W. Ursprung, 2016. "Academic exclusion: some experiences," Public Choice, Springer, vol. 167(1), pages 1-20, April.
    6. Peter J. Boettke & Rosolino A. Candela, 2020. "Productive specialization, peaceful cooperation and the problem of the predatory state: lessons from comparative historical political economy," Public Choice, Springer, vol. 182(3), pages 331-352, March.
    7. Dalibor Roháč, 2009. "Je predpoklad voličskej racionality len mýtus? [Is the assumption of voters' rationality just a myth?]," Politická ekonomie, Prague University of Economics and Business, vol. 2009(2), pages 163-176.
    8. Robert G. Blanton & Bryan Early & Dursun Peksen, 2018. "Out of the shadows or into the dark? Economic openness, IMF programs, and the growth of shadow economies," The Review of International Organizations, Springer, vol. 13(2), pages 309-333, June.
    9. Boettke Peter J. & Butkevich Bridget I., 2001. "Entry and Entrepreneurship: The Case of Post-Communist Russia," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 11(1), pages 1-26, March.
    10. Lotta Moberg & Vlad Tarko, 2021. "Special economic zones and liberalization avalanches," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 10(1), pages 120-139, February.
    11. Boettke, Peter J. & Candela, Rosolino A. & Zhukov, Konstantin, 2023. "The morality of illicit markets: “Greasing the wheels” or “greasing the palm”?," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 411-422.
    12. Benczes, István & Szabó, Krisztina, 2023. "Társadalmi törésvonalak és gazdasági (ir)racionalitások. A közgazdaságtan szerepe és helye a populizmus kutatásában [Social cleavages and economic (ir)rationalities: The role of economics in populi," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 23-54.
    13. Dendi Ramdani & Arjen Witteloostuijn, 2012. "The Shareholder–Manager Relationship and Its Impact on the Likelihood of Firm Bribery," Journal of Business Ethics, Springer, vol. 108(4), pages 495-507, July.
    14. Manuel Funke & Moritz Schularick & Christoph Trebesch, 2023. "Populist Leaders and the Economy," American Economic Review, American Economic Association, vol. 113(12), pages 3249-3288, December.
    15. Emmanuel U. Haruna, 2023. "The multidimensional effect of financial development on the shadow economy in Africa: A dynamic panel analysis approach," International Economics and Economic Policy, Springer, vol. 20(2), pages 327-365, May.
    16. Maria Kravtsova & Aleksey Oshchepkov, 2019. "Market And Network Corruption," HSE Working papers WP BRP 209/EC/2019, National Research University Higher School of Economics.
    17. Auty, R. M., 2003. "Third time lucky for Algeria? Integrating an industrializing oil-rich country into the global economy," Resources Policy, Elsevier, vol. 29(1-2), pages 37-47.
    18. Ahmad, Waqar & Hussain, Babar, 2023. "Fiscal Policy Effects on Shadow Economy: Empirical Evidence from Developing Countries," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 30(2), July.
    19. Aziz N. Berdiev & Brandon Gomes & James W. Saunoris, 2023. "Revisiting the nexus between globalisation and the shadow economy: Untying the influences of de jure versus de facto globalisation," The World Economy, Wiley Blackwell, vol. 46(1), pages 27-54, January.
    20. Sami Dakhlia & Paul Pecorino, 2006. "Rent-seeking with scarce talent: A model of preemptive hiring," Public Choice, Springer, vol. 129(3), pages 475-486, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:kyklos:v:67:y:2014:i:2:p:156-176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.