_Table 1.03 Extensive Regression Analysis (Democracy Sub-Sample)_

|||**De**<br>|**pendent Variable: C**<br>|**PI**<br>||
|---|---|---|---|---|---|
||**(1)**<br>**(GLM)**<br>|**(2)**<br>**(GLM)**<br>|**(3)**<br>**(GLM)**<br>|**(4)**<br>**(OP)**<br>|**(5)**<br>**(OP)**<br>|
||**Additive**|**Additive**|**Factor**|**Additive**|**Factor**|
|**Higher EDD/NEDD**<br>**Ratio**<br> <br>|-0.32***<br> (0.069)|-0.28***<br> (0.12)|-0.65***<br> (0.17)|-0.57**<br> (0.22)|-0.99**<br> (0.48)|
|**Coordinated Market**<br>**Economies**||-0.57**<br> (0.24)||||
|**Standard**<br>**Controls**|√|√|√|√|√|
|**Sample**|Democracy|Democracy|Democracy|Democracy|Democracy|
|**Number of Observations**|28|28|28|28|28|
|**(Pseudo Log)-Likelihood**|-10.11|-10.29|-10.21|-66.15|-66.14|

Note: robust standard errors in parentheses. Standard Controls: Age of democracy, education attainment, latitude, (log) per capita income, and economic openness (long-term). Varieties of Capitalism Control is a dummy variable which takes the value of one for ‘Coordinated Capitalist Economies’* Significant at the 10% level, ** significant at the 5% level, ***significant at the 1% level. See Appendix A for details). _Source: The Author_ Aside from the EDD/NEDD ratio itself, the standard set of controls includes mechanisms that might capture the existence of alternative oversight mechanisms. The standard controls include the age of a democracy, controlling for the fact that democratic learning and institutionalization may affect the efficacy of elections. Furthermore, the controls include the Gastil Index whose civil liberties component controls for the existence of a free media and the ability of civil society to operate independently of government. This controls for some other critical contextual variables that may affect the efficacy of elections (Freedom House, 2011).

Apart from these broad contextual variables that may affect both EDD and NEDD, it is also necessary to control for NEDD-specific, non-electoral oversight mechanisms, as these may provide effective substitutes for electoral control. To do so, the paper uses the Index of Executive Oversight, an interval indicator (ranging from 0-9) constructed by Hamilton and Stapenhurst (2009) using data on the following factors to determine to what extent the non-elected elements of a polity are under the supervision of elected officials/voters at large: (1) the existence and powers of a parliamentary public finance committee (0-3); (2) the ability of elected officials to summon and scrutinize the actions of un-elected officials (0-2); (3) the ability of elected officials to censure and dismiss members of the executive (0-2); (4) the existence of an Ombudsperson (0-1); and (5) the existence of an Access to Information Law (0-1). In addition to this measure, it is also possible to use the World Bank’s indicator for Government Effectiveness as a potential measure of the existence of oversight mechanisms faced by NEDDs. While, this measure is usually used as a measure of rent extraction (e.g. Persson and Tabellini, 2003), the index is in fact supposed to be measuring the extent to which non-elected policy-makers are independent of political control (World Bank, 2010). Therefore, while caution needs to be exercised in interpreting the results, it is possible to use this measure as a robustness check, to see whether the existence of an efficient non-electoral mechanism of oversight, associated with an independent non-elected public sector, is in fact associated with less perceived rent extraction.

As Table 1.04 shows, controlling for the existence of non-electoral oversight mechanisms does not alter the basic results, which remain the same: the EDD/NEDD ratio exhibits a highly statistically significant and negative effect on rent extraction, especially in high-income democracies. Consistent with the large literature on the importance of oversight, both the Index of Oversight and the measure of Government Effectiveness are also associated with reduced rent extraction. These findings suggest that while non-electoral mechanisms clearly play a role in determining rent extraction, they do not affect the role played by the EDD/NEDD ratio, which continues to exercise a large independent effect.

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