A large body of empirical studies finds that comuption and the poor quality of political institutions are major obstacles for economic growth. In particular, it has been suspected that large politically influential business groups subvert institutions, policy, and resource allocation to advance their private economic interests at the expense of society (e.g. Glaeser et al., 2003; Morck et al., 2000). This theory of political capture is not easy to empirically test in a systematic way because the identification of "politically influential businesses is often difficult and subjective, if not impossible, in many countries. Nonetheless, several recent studies attempt to investigate the nexus between politicization. and economic outcome in various transition countries. Hellman et al. (2003) use large firm-level survey data from transition eco- nomies in Europe to examine whether and how politically influential enter- prises affect the extent of property protection and firm growth. . They find that politically influential enterprises enjoy better property protection and superior.