Why do individuals in authoritarian systems seek office in formal political institutions such as legislatures, which are often dismissed as weak and ineffective in interest representation? I argue that Chinese private entrepreneurs seek legislative office to protect their property from government predation. An entrepreneur, by holding a seat in the local legislative assembly, signals to local bureaucrats that he has access to higher-level government officials to report illicit predatory behavior. Results from a national survey show that entrepreneurs who serve in the local legislature spend 25% less on informal payments to local governments, on average. This difference between legislator and non-legislator entrepreneurs holds after controlling for individual and firm-level covariates using a variety of reweighting and matching techniques. Interview evidence sheds further light on the question of why private entrepreneurs are motivated to participate in authoritarian institutions. Two original national field experiments involving Chinese officials provide evidence for the signaling hypothesis. These findings challenge prominent theories of authoritarian politics, which see authoritarian institutions as instruments to arrange power sharing, rent distribution, or information collection. Consistent with the perspective of “institutions as resources,” I show that within authoritarian institutions, entrepreneurial actors can seek opportunities to advance their interests and improve their well being, even when these formal institutions are relatively weak.
Open to all. Lunch provided.