The Privatization Origins of Political Corporations: Evidence from the Pinochet Regime

Felipe González, Mounu Prem, Francisco I. Urzúa

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)417-456
Number of pages40
JournalJournal of Economic History
Volume80
Issue number2
DOIs
StatePublished - Jun 1 2020

All Science Journal Classification (ASJC) codes

  • History
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

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