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Christian Francq, U. Lille 3 Print
Thursday, 01 December 2016, 12:15 - 13:15

Christian Francq, Université de Lille 3

Estimation risk for the VaR of portfolios driven by semi-parametric multivariate models

Abstract : Democracies widely differ in the quality of their political institutions: oftentimes elites and powerful interest groups have a large influence over politics. In this paper, we argue that elite capture in democracies has its roots in the recent non-democratic past of countries. Furthermore, we show that the way in which democratic transitions unfold is a key determinant of the extent of elite capture. We exploit a natural experiment that took place in the Indonesian transition: Soeharto-regime mayors were allowed to finish their terms before being replaced by new leaders. Since mayors' political cycles were not synchronized, this event generated exogenous variation in how long old-regime mayors remained in their position during the democratic transition. Districts with longer exposure to old-regime mayors experience worse governance outcomes, higher elite persistence, and lower political competition in the medium-run. The results suggest that slower transitions towards democracy allow the old-regime elites to find ways of capturing democracy.

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