This chapter tests the hypotheses developed in Chapter One, first using a series of multilevel models and a dataset of over one million Russian firms. It finds empirical support that the presence of economic competition from rivals and weak political parties drive the decision to enter politics by affecting the benefits to be derived from holding office, while only those firms with sufficient resources and in poorer regions can cover the substantial costs of running. Businesspeople run for office when the commitment problem of transacting with politicians through other means is exacerbated. I then show the findings also come through using analysis of a survey of 654 Russian firms conducted in 2016. Finally, I draw on qualitative evidence from 70 interviews in three Russian regions (Tomsk, Ryazan, and Perm) to illuminate just how competition and weak parties incentivize businessperson candidacy.

This chapter presents the empirical setting in Russia and then introduces and describes the data used to test the main arguments throughout the book. First, I describe how businesspeople became attracted to running for office in Russia since the fall of the USSR and defend my focus on regional legislatures as the best level of government to study their candidacies. Next, I document the firm-, candidate-, and region-level data sources and describe the Python algorithm used to match candidates with firms. I then present summary statistics about the types of candidates, firms and sectors connected to businessperson candidacy in Russia from 2004–2011.

Do firms with directors holding elected political office benefit from political connections? Restricting the analysis to elections in single-member districts, this chapter uses a regression discontinuity design to identify the causal effect of gaining political ties, comparing outcomes of firms that are directed by candidates who either won or lost close elections to regional legislatures. Having a connection to a winning politician increases a firm’s revenue by 60 percent and profitability by 15 percent over a term in office. The chapter then tests between different mechanisms, finding that connected firms improve their performance by gaining access to bureaucrats, and not by signaling legitimacy to financiers. The value of winning a seat increases in more politically competitive regions, but falls markedly when more businesspeople win office in a convocation. Politically connected firms extract fewer benefits when faced with greater competition from other rent-seekers.

This chapter investigates whether businessperson politicians actually govern differently. I argue that given their preferences and managerial expertise, businesspeople in office may adopt policies favorable to the business community and improve government efficiency. To test these claims, I collect data on over 33,000 Russian mayors and legislators and investigate policy outcomes using detailed municipal budgets and over a million procurement contracts. Using a regression discontinuity design, the results show that businessperson politicians increase expenditures on roads and transport, while leaving health and education spending untouched. Prioritizing economic over social infrastructure brings immediate benefits to firms, while holding back long-term accumulation of human capital. However, businesspeople do not reduce budget deficits, but rather adopt less competitive methods for selecting contractors, particularly in corruption-ripe construction. In all, businessperson politicians do more to make government run for business, rather than like a business.

This chapter develops the main argument to explain businessperson candidacy. As a direct strategy, businessperson candidacy gives interest groups unmediated access to policymaking, in contrast to indirect strategies, such as lobbying and making campaign contributions, which require politicians to work as intermediaries. Why do firm directors invest resources into occupying elected office, rather than use the more conventional indirect approaches? At heart is a commitment problem: there is no guarantee that money given to a politician will be returned in-kind with policy. Firms cannot specify quid pro quo arrangements with politicians where policy influence is traded for contributions such as money, information, and/or votes. Businesspeople then run for elected office when (1) they cannot trust that the politicians they lobby will represent their interests and (2) their firms have the resources available to contest elections. This theory predicts the probability of politician shirking (reneging on their promises) depends on the extent of economic competition and presence of political parties capable of enforcing informal quid pro quo agreements. When politicians are untrustworthy and unresponsive to special interests, directly occupying a legislative seat becomes the only viable legal avenue for a firm achieving desired political influence.

The final chapter first summarizes the main arguments made in the book, overviewing the hypotheses developed and evidence used to test them in the empirical chapters. The conclusion also addresses the question of external validity by drawing in examples of similar phenomena from other countries around the world, both developing and developed, that are experiencing significant interest in political office from businesspeople. The book paints a somewhat grim picture of the effects of businesspeople winning elected office. In this chapter, I lastly examine whether there are policy solutions that might deter those businesspeople looking to abuse their positions in their private interests from running. I close by offering a number of recommendations that emerge from the analysis, both including and going beyond ethics laws, that could be of use in containing rent-seeking by these individuals in power.

This chapter opens the manuscript with an anecdote about a prominent Russian businessperson politician as well statistical evidence about the breadth of businesspeople working in public office around the world. It then catalogues our extant knowledge of why special interests like firms seek to influence policymaking and the means through which they do so, along the way defining key terms used throughout the manuscript. Next, it introduces the puzzle of businessperson candidacy, contrasting the high financial and time costs required to run for and hold office with our lack of knowledge about the benefits to be had. The chapter then briefly outlines the main arguments and evidence presented in the book and provides a justification for why Russia is a compelling case from which to build theory. In general, businessperson candidacy has received very little if any attention from scholars, especially given how widespread it is; the last section demonstrates how this book fills that gap. The chapter then closes by presenting the contributions the manuscript makes to our understanding of business–government relations, interest group politics, descriptive representation, authoritarian institutions, and the nature of policymaking in transitioning economies.