We investigate the macroeconomic consequences of populism, focusing on the impact of populist leadership on the prevalence of the shadow economy. To do this, we employ a matrix completion approach to compare countries during periods of populist leadership to empirically constructed counterfactuals. Results show that populist leadership is associated with a smaller shadow economy. Quantitatively speaking, the average size of the shadow economy in countries with a populist leader is approximately 1.5 percentage points lower than countries without a populist leader. Overall, these results withstand various robustness checks, including differentiating between right-wing and left-wing populist leaders, using a different measure of the shadow economy, examining heterogeneity across income levels, considering alternative dimensions of governance quality, accounting for differences in income and wealth inequality, and testing the sensitivity of the results to changes in the donor pool. These findings highlight the importance of accounting for governmental leadership in understanding the drivers of shadow operations.
Firm corruption remains a persistent constraint on private-sector development in many African economies. This study examines whether the historical slave trade helps explain the persistence of firm corruption. Combining country-level historical data on slave exports with firm-level corruption data from the World Bank’s Enterprise Surveys conducted between 2006 and 2019, we find a robust positive relationship between historical slave extraction and contemporary firm corruption. To interpret this persistence, we draw on theories of injustice and bad faith to conceptualize institutional injustice as a feature of extractive institutions that may normalize corruption and weaken expectations of fair public authority. In a separate exploratory analysis using World Values Survey data from 1990 to 2019, we find suggestive evidence that historical slave extraction is associated with contemporary perceptions of formal institutional injustice and informal norms tolerant of bribery. This study contributes to research on governance, corruption, and institutional persistence by highlighting the long-run association between historical extraction and contemporary firm corruption and advancing an institutional-injustice perspective on how extractive legacies may persist in formal institutions and informal norms.
Our study examines how terrorism is associated with macroeconomic stability and whether institutional quality conditions this relationship across 20 African countries over 1990–2020. The dependent variable is a four-component Macroeconomic Stability Index (MSI) combining inflation, public debt, the current-account balance and unemployment. The MSI captures macroeconomic conditions relevant to resilience rather than resistance, recovery or adaptation itself. External validation against the WEF-derived World Bank benchmark is positive but statistically imprecise (Pearson r = 0.367, p = 0.148; Spearman ρ = 0.394, p = 0.118), so the MSI remains an operational stability index. Restricted System GMM provides the principal dynamic and endogeneity benchmark, half-panel jackknife bias-corrected fixed effects provide the main robustness check for persistence, and two-way fixed effects with Driscoll–Kraay inference are retained as a transparent association and measurement-sensitivity benchmark. Macroeconomic stability is strongly persistent across estimators, whereas the terrorism relationship is less stable: casualty-based estimates change sign and significance across estimators, whereas incident frequency is negatively associated with MSI in the dynamic fixed-effects benchmark (β = − 0.0044 per ten incidents, p < 0.001) and remains statistically significant under alternative covariance estimators and added controls, although the association becomes statistically imprecise and loses conventional significance when Nigeria is excluded. Neither the aggregate institutional index nor the five individual governance dimensions provide robust evidence of a uniform linear buffering relationship. The findings therefore point to persistent macroeconomic conditions and heterogeneous terrorism transmission rather than a single estimator-invariant terrorism coefficient or broad institutional shield.
This paper bridges classical rent-seeking theory with modern political economy, to explain variation in campaign finance, interest-group influence, and policy divergence across electoral democracies. In the model, interest groups provide political and informational resources, including campaign contributions and policy support, while electoral candidates strategically adjust their platforms to attract and retain support from groups whose preferences are sufficiently aligned with their own electoral objectives. Importantly, this framework reconceptualizes lobbying as a contest shaped by both voter-side incentives and candidate’s rent-seeking strategies. The results demonstrate that policy divergence or convergence depends critically on the spatial distribution of organized interests and the structure of campaign contributions. When lobbying is asymmetric, candidates polarize and move toward their respective financial supporters. However, when lobbying is symmetric or bipartisan, convergence arises as candidates internalize competing demands. It is also found that as more lobbies enter the fray, greater competition among organized interests need not uniformly increase policy responsiveness. Instead, the direct candidate-lobby exchange evolves to a more complex contest, where influence begins at parity, shifts with ideological proximity, and increasingly favors the candidate’s default as resistance rises or lobbying becomes less worthwhile.
This study examines within-group heterogeneity in access to reservation benefits in government jobs (RBGJs) among Scheduled Caste (SC) households in Madhya Pradesh. Using primary survey data from 525 SC households across nine districts, this study employs Fairlie nonlinear decomposition as the principal analytical approach, complemented by Firth logistic regression and predicted probabilities. The Fairlie decomposition examines the male–female difference in access to RBGJs. It estimates the contribution of observed education and income characteristics to this difference, while the regression analysis identifies household-level associations. The findings show that parental government-sector background, higher educational attainment, household income, and gender are associated with access to RBGJs. The observed male–female difference is small, while income categories make the largest statistically significant contributions among the observed characteristics included in the Fairlie decomposition. Education categories do not make statistically significant contributions to the gender decomposition. This study also considers information asymmetry, network support, institutional familiarity, and economic resources as plausible pathways through which formal reservation entitlements may be converted into employment opportunities. These mechanisms were not directly measured and are therefore not treated as empirical findings. By focusing on within-group heterogeneity, this study extends affirmative action research beyond conventional SC-versus-non-SC comparisons. It underscores the importance of strengthening the conditions that enable eligible households to access RBGJs. The findings also inform policy efforts to advance substantive equality.
