This article discusses political state capture in the context of party patronage. Evidence of this is delivered from state-owned enterprises (SOEs) and the rotations of members of their management and supervisory boards. In this case, it is deemed that an interest group, which consists of politicians and representatives in the government administration, decides about the appointment and dismissal of board members through the corporate governance of SOEs and ownership policy of the state. We analyzed the scale and intensity of rotations in Poland of about twelve thousand joint-stock companies in the years 2001–2017 according to their ownership structure. We show that changes of managers and supervisory board members in state-owned enterprises are higher than in private companies and are related to political elections. We estimated that on average three months after a new government is formed, a peak of changes in the composition of boards is observed, though they are earlier in the case of a supervisory board. We conclude that this can be regarded as an example of state capture by politicians.
This paper aims to analyse the allocation of the COVID-19 response funds from the perspective of the political alignment hypothesis. The authors focus on the allocation of the second and third rounds of the Governmental Fund for Local Investments (part of the COVID-19 Response Fund) in Poland. Using the logit and OLS models and the regression discontinuity design the authors show that mayors aligned with the central government were significantly more likely to receive the funds, as well as in higher per capita values, than mayors aligned with the opposition or unaligned with any party in parliament when the allocation was based on a discretionary decision. The results support the political alignment hypothesis and highlight the danger of partiality in the allocation of the COVID-19 response funds.
Motivation: Notwithstanding the privatization processes, state-owned enterprises (SOEs) continue to play an important role in Poland and other post-socialist countries. Governments declare that privatization is completed and that they do not intend to sell any more enterprises. They justify this by pointing to the national security and strategic sectors in which companies should remain state-owned. Unfortunately, SOEs are used by politicians for economic and personal rent-seeking. Aim: This article aims to discuss the idea of economic rent-seeking by politicians, particularly its impact on SOEs. We claim that politicians, being a group of interest, capture SOEs in order to achieve private gains for themselves and their parties, which compromises economic performance of these companies. We analyze the mechanism of influence that politicians have on SOEs, including the processes related to rotations of managers
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