The purpose of this paper is to explore the effect of Public Private Dialogues (PPD) on cronyism accounting for various cultural and governance institutions.
It proposes a number of hypotheses on: whether PPD characterized by high official representation and business representation, through mainly building trust, succeed in minimizing cronyism; whether certain cultural and governance institutions help PPD in achieving this; and in cultural settings which are originally inducing cronyism whether PPD help in minimizing cronyism. These are tested empirically using an ordinary least squares multivariate panel regression.
High official representation and high business people’s participation in PPD were found to help in minimizing cronyism in different cultures. This is arguably attributed to building trust in cultures characterized by having low general trust and low trust in governments. Accountability and transparency are significantly assisting PPD in this regard. Yet, PPD do not always succeed in taming cronyism, and in particular in ethnic fractionalized societies and societies having high collective cultures.
The biggest challenge this research faced was estimating a proxy for PPD. Better data on business associations’ participation worldwide are needed to construct a more developed proxy.
PPD with high business participation and government representation should be encouraged. The same is true for reform leading to higher levels of transparency and accountability.
Constructing a proxy for PPD that allowed meta-analysis; and investigating theoretically and empirically the effect of the interaction of PPD with various institutions on cronyism.
