The Value of Political Capital: Dictatorship Collaborators as Business Elites

43 Pages Posted: 24 Jan 2018 Last revised: 31 Jul 2018

See all articles by Felipe González

Felipe González

Pontifical Catholic University of Chile - Institute of Economics

Mounu Prem

Universidad del Rosario

Date Written: July 20, 2018

Abstract

What is the value of political capital for individuals? Towards the end of the Pinochet dictatorship in Chile, military and civilian collaborators entered the business elite, controlling the largest and most important firms in the country. Using a novel panel dataset of board members in these firms, we document an appointment premium for those who had previously collaborated with Pinochet. After democratization, however, collaborators were removed from boards and their compensation premium disappeared. These results suggest that dictatorship collaborators earn a premium in the business world in dictatorship, but not in democracy.

Keywords: political capital, collaborators, dictatorship, armed forces

JEL Classification: D2, G2, G3, L1, M2, N86, O16

Suggested Citation

González, Felipe and Prem, Mounu, The Value of Political Capital: Dictatorship Collaborators as Business Elites (July 20, 2018). Available at SSRN: https://ssrn.com/abstract=3108784 or http://dx.doi.org/10.2139/ssrn.3108784

Felipe González

Pontifical Catholic University of Chile - Institute of Economics ( email )

Casilla 76
Correo 17
Santiago
Chile

Mounu Prem (Contact Author)

Universidad del Rosario ( email )

Casa Pedro Fermín
Calle 14 # 4-69
Bogota
Colombia

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