Google gives up Project Maven following “terrible” backlash; angry Facebook shareholders demand an end to Mark Zuckerberg’s “dictatorship”; American startups are in a 13-year slump; and Italy has a new government.
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How China’s Anti-Corruption Campaign Is Moving Financing Away from State-Owned Enterprises
Are anti-corruption reforms effective in reducing economic rent seeking and constraining the influence of special interests? New research from Tsinghua University PBC School of Finance finds that anti-corruption investigations in China are associated with credit reallocation from less productive state-owned enterprises (SOEs) to more productive non-SOEs. The series of investigations constitute staggered events to identify the causal impact of anti-corruption reforms on bank financing.
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Editors’ Briefing: This Week in Political Economy (April 28–May 4)
George Mason University faces controversy over its relationship with donors; the former CEO of Volkswagen is charged in relation to the company’s diesel emissions cheating scandal; and are Google and Facebook already trying to undermine Europe’s new privacy rules?
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What Glue Holds Communist Capitalism Together in China? Cronyism
With a few cronyist tweaks, China’s communist leaders made capitalism safe for Party rule. But will cronyism become China’s next booming export?
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When Taxpayers Subsidize Corporate Lobbying: How Firms Use Charitable Giving to Influence Politics
A new Stigler Center working paper examines a more roundabout way that companies can influence legislators: by donating money to charities in lawmakers’ districts. The authors find that the magnitude of these tax-exempt charitable flows dwarfs what firms spend in PACs.
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In a Mexican Establishment Rattled by Corruption Scandals, Impunity Reigns
High-profile scandals like Odebrecht, The Panama Papers, and Swiss Leaks have brought down powerful politicians and businesspeople across Latin America. In Mexico, however, not a single person has been indicted, much less convicted, for wrongdoing in any of these cases.
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“What’s Happening in the U.S. and in European Countries Is a Reaction Against the Political Class”
“Despite some specifics on the national level, I would say that all the populist regimes and leaders share common characteristics,” says José Ugaz, the chair of Transparency International and a leading anti-corruption crusader who helped bring down the Fujimori regime in Peru.
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Bribery, Cooperation, and the Evolution of Prosocial Institutions
How the science of cooperation and cultural evolution will give us new tools in combating corruption.
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How Biology Explains Back-Scratching Between Wall Street and Government
The revolving door of government and business explained in the lab.
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Eliot Spitzer: The U.S. Never Had the Will and the Ability to Hold the Most Powerful to Account
In a special interview with ProMarket, former New York governor Eliot Spitzer talks about financial regulation, regulatory capture, and antitrust. Part 1 of 2.
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How Market Power Leads to Corporate Political Influence
Neoclassical economic theory assumes that firms have no power to influence the rules of the game. A new paper by Luigi Zingales argues: This is true only in competitive product markets. When firms have market power, they will seek and obtain political influence and vice versa.
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Spoiled Meat Scandal Reveals the Influence of Business and Media on Brazil’s Politics
The recently-released secret taping of a conversation between Brazil’s president Michel Temer and one of the country’s most prominent businessmen reveals the extent to which big business influences politics and the judiciary in Brazil.
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