What Determines State Capture in Poland?

Alwasiak, Stanislaw and Lewandowska-Kalina, Monika and Kalina, Lech and Kowalewski, Oskar and Mozdzen, Michal and Rybinski, Krzysztof (2013): What Determines State Capture in Poland?

Abstract

In this paper we examine the determinants of ex-ante state capture analyzing all the legal acts that have been passed in the period 1990-2011 in Poland. We find that during this the majority of legal acts were passed with the aim to satisfy the interest of particular groups. Furthermore, the regression analysis shows that the likelihood of state capture increases during the period of economic growth and local elections. The likelihood of state capture, however, declines during presidential elections. The results we attribute to different interests of political parties in the period of local and presidential election. Finally, we find that the state capture increased over the years in Poland. Additionally, we show that the EU accession did not prevent state capture in Poland. In contrast, the financial crisis of 2007 resulted in a wake-up effect and the likelihood of state capture declined in Poland.

• Item Type: MPRA Paper
• Language: English
• Keywords: law, corruption, state capture, public interest, transition country, Poland
• Subjects: H - Public Economics > H4 - Publicly Provided Goods > H40 - General; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; H - Public Economics > H6 - National Budget, Deficit, and Debt > H62 - Deficit ; Surplus; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P37 - Legal Institutions ; Illegal Behavior

References

Alesina, A., Perotti, R., Tavares, J., (1998) The Political Economy of Fiscal Adjustments, Brookings Paper 28(1), 197-248.

Alesina, A. (2000), The Political Economy of the Budget Surplus in the United States, Journal of Economic Perspectives 14, 3-19.

Alwasiak, S., Lewandowska-Kalina, M., Kalina, L., Kowalewski, O., Rybinski, K. I., Mozdzen, M., (2012), Report on the role of interest groups in in the legislative process, Mediaworksprint, Warsaw.

Dallago, B. (1997), The Economic System, Transition and Opportunities for Entrepreneurship. In Entrepreneurship and SMEs in Transition Economies, The Visegrad Conference. OECD, Paris, 103-124.

Estache, A., Martimort, D. (1999). Politics, transaction costs, and the design of regulatory institutions, Policy Research Working Paper Series 2073, The World Bank.

Frye, T., Shleifer, A. (1997), The Invisible Hand and the Grabbing Hand, American Economic Review 87, 354-358.

Goetz K. H., Zubek R. (2007) Government, Parliament and Lawmaking in Poland, Journal of Legislative Studies, 13(4), 517-538.

Guardiancich, I., (2004), Welfare State Retrenchment in Central and Eastern Europe: The Case of Pension Reforms in Poland and Slovenia, Managing Global Transitions 2(1), 41-64.

Hellman, J. S., Jones, G., Kaufmann, D. (2000), Seize the State, Seize the Day: State Capture, Corruption and Influence in Transition. World Bank Policy Research Working Paper 2444, The World Bank.

Hellman, J., Kaufmann, D., (2001), Confronting the Challenge of State Capture in Transition Countries, Finance and Development, vol. 38, no. 3,.

Hellman, J., Jones, G., Kaufmann, D. (2000), Seize the State, Seize the Day: State Capture, Corruption and Influence in Transition, World Bank Policy Research Working Paper 2444, The World Bank.

Hellman, J., Jones, G., Kaufmann, D., Schankerman M. (2000), Measuring Governance, Corruption, and State Capture: How Firms and Bureaucrats Shape the Business Environment in Transition Economies, World Bank Policy Research Working Paper 2312, The World Bank.

Hellman, J., Schankerman M. (2000). Intervention, Corruption and Capture, Economics of Transition 8(3), 545–576.

Jasiecki K. (2007), Regulating Lobbying in Poland: Background, Scope and Expectations, mimeo.

Johnson, S., Kaufmann, D., Shleifer, A. (1998). The Unofficial Economy in Transition, Brookings Papers on Economic Activity 2, 159-239.

Kowalewski, O., Rybinski, K. (2011), The hidden transformation: the changing role of the state after the collapse of communism in Central and Eastern Europe, Oxford Review of Economic Policy, 27(4), 634-657.

Martimort, D. (1999). The Life Cycle of Regulatory Agencies: Dynamic Capture and Transaction Costs. Review of Economic Studies, 66(4), 929-47.

Rajan, R.G., Zingales, L. (2003), The Great Reversals: The Politics of Financial Development in the Twentieth Century, Journal of Financial Economics 69(1), 5-50.

Roberts, K., Tholen, J. (1998), Young Entrepreneurs in East-Central Europe and the Former Soviet Union, IDS Bulletin, 29(3), 59-64.

Rogoff, K. (1990), Equilibrium political budget cycles. American Economic Review 80, 21–36.

Rutland, P. (1999) Mission Impossible? The IMF and the Failure, Review of International Studies, 25(5), 183-200.

Sachs, J. (1994), Poland’s jump to market economy. MIT Press, Cambridge, MA.

Scase, R. (2000), Entrepreneurship and Proprietorship in Transition: Policy Implications for the Small- and Medium-size Enterprise Sector. United Nations University World Institute for Development Economics Research, Helsinki.

Shleifer, A., Vishny, R. (1999), The Grabbing Hand. Harvard University Press: Cambridge, MA.

Shleifer, A. (1996), Origins of Bad Policies: Control, Corruption, and Confusion, Rivista di Politica Economica 86(6), 103-124.

Shleifer, A., Vishny, R. (1994), Politicians and Firms, Quarterly Journal of Economics, 995-1025.

Shleifer, A. Vishny, R. (1993), Corruption, Quarterly Journal of Economics 108(3), 599–617

Smallbone, D., and Welter, F. (2001), ‘The Distinctiveness of Entrepreneurship in Transition Economies’ Small Business Economics 16, 249-62.

Stigler, G. (1971). The Economic Theory of Regulation. Bell Journal of Economics, II, 3-21

Soto de, H. (1989), The Other Path. New York: Basic Books.

Zubek R. (2008), Parties, Rules and Government Legislative Control in Central Europe: the Case of Poland, Communist and Post-Communist Studies, 41(2), 147-61.

Vachudova M. A (2005), Europe Undivided: Democracy, Leverage,and Integration After Communism. Oxford University Press, 2005.