The Political Economy of business politicians: the effects of deindustrialization on the supply of candidates in Brazil

The entry of business figures into politics within democratic systems has long been a concern in the Social Sciences. Some argue that businesspersons need not directly represent themselves, given their ability to exert influence on politics indirectly through economic means. This influence may manifest through organized actions like lobbying, pressure tactics, or financial contributions to electoral campaigns. The dynamic between politicians and business figures is often framed as a principal-agent relationship. Here, the 'principals' act through the 'agents' to secure favorable regulations, subsidies, or to thwart undesirable laws. Politicians, in return, receive financial contributions, whether legal or illegal. Some authors highlight two factors that historically favored the principal-agent relationship and hindered the self-representation of businesspeople: traditional parties acting as gatekeepers in candidate selection, and the perceived unavailability of entrepreneurs due to the nature of business management techniques. However, in recent years, these factors have weakened. Traditional political parties, especially in Europe, have seen a decline in confidence, while changes in management and political communication methods have made politics more accessible to business figures, sidelining professional politicians. This analysis aligns with literature on political elites, which observes the rise of businesspeople in European parliaments, the emergence of business parties in Europe and Latin America, and an increase in personalization and populism in political representation. An unexplored hypothesis in this context is how economic changes, specifically deindustrialization, might activate mechanisms that increase the number of business candidates. This article posits that deindustrialization is a crucial variable in the debate on corporate self-representation, affecting party and candidate choices, the job market, and the values associated with political representation. The primary objective of this article is to investigate whether deindustrialization in Brazil impacts the likelihood of business candidates entering the political arena. The study utilizes data on federal deputy candidates from 1998 to 2022, along with relevant socioeconomic data. The results consistently support the hypothesis across various statistical specifications. Further analysis explores a potential explanatory mechanism: the increased availability of right-wing parties in response to deindustrialization at the district level, influencing the likelihood of launching entrepreneurial candidates. Through a combination of quantitative and qualitative methods, the study identifies a unique dynamic in the insertion of business figures into Brazilian politics. Recent campaigns have seen businesspeople from sectors previously uninvolved in politics, lacking electoral campaign experience, and embracing an 'entrepreneurial' ideology in politics.