Here's a concrete example, related to worker safety -- a common plight in emerging markets: In China, for instance, corruption seems to lead to under-par worker safety, which in turns leads to local unrest, which in turn could one day take a more radical, durable, or national form:
Some analysts believe corruption is partly to blame—that many companies use their political relationships to circumvent safety oversight and regulations. New research provides backing for this claim, demonstrating a strong link between worker deaths from accidents and the political connectedness of corporate executives.
We studied all publicly traded Chinese companies in safety-regulated industries, including petroleum and natural gas extraction, mining, chemicals manufacture, and construction—a total of 276 firms. We added up the annual fatalities in each firm from 2008 to 2011, using company-reported statistics, government data, and press reports. After examining the employment histories of the firms’ top (C-suite-equivalent) leaders, we defined a company as “connected” if at least one executive previously held a high-level government post.
Our results showed that on average, the rate of worker deaths is five times greater at connected companies than at similar companies that lack political connections. The finding that connected companies have much worse records was remarkably consistent from year to year. Moreover, deaths per 10,000 workers rose by almost 10, on average, during the year following the arrival of a connected executive at a previously unconnected firm, and fell by 6.4 during the year following a connected executive’s departure.