Benin – Campaign finance and state capture

This publication is part of the Benin Institutional Diagnostic.

This chapter uses a novel database on contractual arrangements between politicians, political brokers, and businessmen in Benin to investigate the way the nature of these arrangements depends on the level of political competition. We find that firms provide financial support to local and national politicians in exchange for policy concessions, direct budget support, ‘favourable’ procurement auctions (bid-rigging), and various forms of state capture. In addition, while bid-rigging features constantly in politician–firm contracts, increased electoral uncertainty is associated with less demand for policy concession and stronger preference for direct forms of state capture, i.e. the appointment of firms’ agents or cronies to key government positions. In other words, electoral uncertainty could simultaneously contribute to democratic consolidation through political turnover, and to the worse forms of corruption through state capture by business elites.

Contents

• 1 Introduction
• 2 Theory and testable hypotheses
• 3 Data and methodology
  • 3.1 Descriptive statistics on campaign funding
• 4 Results
  • 4.1 Contracts between firms and politicians
  • 4.2 Contracts between politicians and voters
  • 4.3 Political uncertainty and firms’ strategic decision-making
• 5 Discussion and conclusion
• Discussion of ‘Campaign finance and state capture’
  • Networks
  • Politician networks
  • References

Editors:

• Rafael Ch, New York University
• Mathias Hounkpe, Open Society Initiative for West Africa, Senegal
• Léonard Wantchekon, Princeton University

With discussion by:

• Cesi Cruz, Vancouver School of Economics