Social and Behavioral Sciences Commons^™

Campaigning For Capital: Fair Elections And Foreign Investment In Comparative Perspective, Michael Touchton

Political Science Faculty Publications and Presentations

This paper addresses the question of what explains capital inflows. In so doing, it makes several contributions to the literature on political risk and the determinants of foreign investment. First, I clarify the relationship between capital flows and democracy’s constituent parts in a way that takes arguments beyond aggregate democracy indicators and static political institutional structures. Specifically, I argue that fair elections signal government respect for democracy and the rule of law in a highly visible manner that investors can access. I show how investors use the fairness of elections as a way to assess political risk and to inform …