The Specter of Cronyism: Three Essays on the Political Economy of Political Capitalism

Andre Carlos Ribeiro Quintas

Advisor: Christopher Coyne, PhD, Department of Economics

Committee Members: Rosolino Candela, Peter Boettke, Erwin Dekker

Online Location, https://gmu.zoom.us/j/94875463438?pwd=YdaSV4w018o3gxyfbTYpyJeWrrDXfx.1
April 03, 2026, 02:00 PM to 04:00 PM

Abstract:

This dissertation examines the political economy of cronyism in contemporary democracies and develops a unified framework to explain its emergence, persistence, and political consequences—most notably the rise of populism. Across three papers, I draw on analytical tools from public choice, the Virginia School, and comparative institutional analysis to argue that cronyism is not an aberration of democratic capitalism but a structural outcome of the current democratic setting.

The first paper provides the conceptual foundation by recovering and systematizing a neglected “politics as conflict” branch within the Virginia Political Economy school. In contrast to the dominant politics-as-exchange framework, this approach—associated with Tullock, Wagner, and Holcombe—treats political life as shaped by coercion and elite dominance. It offers, I argue, a more realistic lens for understanding how political–economic elites shape rules, extract rents, and entrench privileges, thereby establishing the theoretical basis for cronyism as an endogenous feature of democratic systems.

The second paper applies this perspective to show how specific institutional features of contemporary democracies systematically generate opportunities for entanglement between political and economic actors. Cronyism arises not from democracy per se but from the current institutional democratic setting.

The third paper explores the direct consequences of cronyism and the credibility crisis it generates. We show how declining trust and perceptions of elite collusion make populist strategies more attractive and politically effective. Populism thus emerges as a downstream consequence of cronyism.

Together, the papers demonstrate that addressing cronyism—and the populism it fuels—requires reforming the underlying democratic institutions that generate incentives for privilege and that weaken political trust.