Gehlbach, ScottKeefer, Philip2012-03-302012-03-302011Journal of Comparative Economics01475967https://hdl.handle.net/10986/5768What explains private investment in autocracies, where institutions that discourage expropriation in democracies are absent? We argue that institutionalized ruling parties allow autocrats to make credible commitments to investors. Such parties promote investment by solving collective-action problems among a designated group, who invest with the expectation that the autocrat will not attempt their expropriation. We derive conditions under which autocrats want to create such parties, and we predict that private investment and governance will be stronger in their presence. We illustrate the model by examining the institutionalization of the Chinese Communist Party.ENPolitical Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior D720CapitalInvestmentCapacity E220Economic Development: Financial MarketsSaving and Capital InvestmentCorporate Finance and Governance O160Formal and Informal SectorsShadow EconomyInstitutional Arrangements O170Socialist Systems and Transitional Economies : Political EconomyProperty Rights P260Socialist Institutions and Their Transitions: Financial Economics P340Journal ArticleWorld Bank