Why Do Voters Elect Business Candidates?

• In Event: Economic Interests and Elections

Abstract

In the past two decades, it has become increasingly common for business professionals to be elected for public office across developing democracies. At the same time, growing evidence suggests that politicians with a business background implement policies that serve their firm's interests and not the interests of the majority of voters. This creates a puzzle: why would voters elect candidates who are not only descriptively very different from themselves but also implement policies that are not in their interest? Although there exist several explanations that focus on voter demand or candidate supply, there is little consensus on the specific mechanisms through which this relationship operates.

We identify five families of mechanisms that explain the success of business candidates--what we term “voter preferences,” “signaling,” “distribution,” “self-selection,” and “party selection” mechanisms--and run a series of survey experiments with voters, business professionals, and business politicians in combination with fine-grained observational data on the selection of business candidates by parties from the pool of candidates in South Africa that permit us to compare the explanatory power of distinct mechanisms within each of these five families.

Preliminary results suggest that the increases in the number of business politicians are not the results of voter preferences per se. Instead, it is a combination of the ability of business candidates to signal their economic competence, their ability to distribute more benefits than other candidates before elections, and a positive bias by parties to select business professionals in the candidate selection. Using a structural model, we estimate the relative importance of each factor as well as the counterfactual distribution of business politicians under different institutional scenarios.

Authors

• Felix Hartmann, Copenhagen Business School

• Mogens K. Justesen, Copenhagen Business School

• Benjamin Egerod, Copenhagen Business School