City Research Online

Abstract

We show that the sale of state owned firms in dictatorships can help political corporations to emerge and persist over time. Using new data, we characterize Pinochet’s privatizations in Chile and find that some firms were sold underpriced to politically connected buyers. These newly private firms benefited financially from the Pinochet regime. Once democracy arrived, they formed connections with the new government, financed political campaigns, and were more likely to appear in the Panama Papers. These findings reveal how dictatorships can influence young democracies using privatization reforms.

Publication Type:	Article
Additional Information:	This article has been published in a revised form in The Journal of Economic History https://www.cambridge.org/core/journals/journal-of-economic-history. This version is published under a Creative Commons CC-BY-NC-ND. No commercial re-distribution or re-use allowed. Derivative works cannot be distributed. © Cambridge University Press.
Subjects:	H Social Sciences > HD Industries. Land use. Labor J Political Science > JA Political science (General)
Departments:	Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

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