Political Connections Have Benefited Millionaires

CONNIn the overlapping worlds of business and politics are a substantial group of billionaire capitalists who have used their government connections to grow richer still, according to a new study from researchers at Columbia and Villanova universities.

The study, completed independently from FORBES but which used FORBES? billionaire rankings from 1987, 1992, 1996 and 2002, pointed to 154 billionaires ? some profiting from outright cronyism, according to the study, while others used under-the-radar government deals to strengthen their companies.

One example highlighted by the report?s coauthors, Sutirtha Bagchi, of Villanova, and Jan Svejnar, of Columbia, is the Indonesian Prajogo Pangestu. He went from running a small timber outfit to seizing control of Barito Pacific, the world?s largest producer of tropical-hardwood plywood. How?d he do it? Bagchi and Svejnar say his success is rooted in a decision by the Indonesian government to reschedule debt owed by Pangestu?s companies. Plus, he was protected by government tariffs.

The study also identified the countries in which this type of government-and-business collusion happened the most, a list including Argentina, Malaysia and Russia.

Read more at?FORBES