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Doing business while holding public office: Evidence from Mozambique’s firm registry

Author

Listed:
  • Finn Tarp

    (University of Copenhagen, Denmark)

  • Sam Jones

    (UNU-WIDER, Mozambique)

  • Felix Schilling

    (Copenhagen Business School)

Abstract

We link the universe of owners of businesses formally registered in Mozambique since Independence to a new database of politically exposed persons. Recreating the dynamic network of ties between firm owners, we estimate the value of party political and executive mandates to their personal business interests. We find holders of political office attain significantly faster growth not only in the number of companies they own but also in their structural power within the business-owner network, as measured by their ‘godfather centrality’. Such growth is concentrated in joint-stock firms active in trade and finance sectors and is even larger once we aggregate the analysis to the family-name level. This is consistent with politicians accumulating private sector wealth by acting as rentier-brokers.

Suggested Citation

  • Finn Tarp & Sam Jones & Felix Schilling, 2021. "Doing business while holding public office: Evidence from Mozambique’s firm registry," DERG working paper series 21-08, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    • Handle: RePEc:kud:kuderg:2108
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    More about this item

    Keywords

    firm registry; beneficial ownership; political connections; rent-seeking; Mozambique;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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