does political competition matter for public goods provision? evidence from russian regions olga...

Does political competition matter for public goods provision?

Evidence from Russian regions

Olga [email protected] State University

• Does political competition matter for public policies under conditions of unfair elections and autocracy?

• Which mechanisms of government accountability give better results under conditions of suppressed political competition? – Formal vs informal

What does the literature tell?

• Topic 1: Political competition – Besley and Burgess (2002) – Careaga and Weingast (2001) – Acemoglu and Robinson (2006) – But implicit assumption about democracy!

• Topic 2: Efficiency of accountability mechanisms – formal vs informal– Sonin (2010) – Zhuravskaya and Persson (2011)

Stylized factsStylized facts: Russian regions

• 90s- early 2000s Political monopoly of local elite: weak central government and political parties

• mid-2000s Transition from the monopoly of local elite to the monopoly of federal elite

• Late 2000s Political monopoly of the federal elite: strong central government and the ruling party- “United Russia”


• 2001 - the law regulating political parties’ activities – 44 political parties (2003)

– 7 political parties (2009)

• 2003 - the new elections law– majoritarian rule was replaced by a mixed-proportional rule or

proportional rule (2007)

• 2005 replacement of governors’ elections by their appointments


• Two kinds of political competition– Between local and federal elites

– Between political parties – still weak at regional level !!! • No platforms! Cares of private benefits only

• Two kinds of governors– New bureaucrats

• represent interests of national ruling party and federal elite

– Old bureaucrats – have two contracts:• Explicit with federal elite and national ruling party

• Implicit with local elite

Conceptual Framework

• A new governor

1

)(,Pr 0

eg

etPSsgSU NG

• An old governor

1

,,Pr 0

leg

gfmetPSslgSU OG


G

Pu

blic

go

od

s

Share of the ruling party

Governor-new bureaucrat

Governor-old bureaucrat

S0 S1 S2 S0


Tested hypotheses

OGNG

OGNG

OGNG

ggs

ggs

ggs

10

1

0

0

0

0

HypothesesHypotheses

• governors-“new bureaucrats” provide less public goods than “old bureaucrats” if the share of the ruling party is very small or very big

• governors- “old bureaucrats” provide less public goods than “new bureaucrats” if the share of the ruling party is not too small or big

Data and estimation strategyData and estimation strategyUnbalanced panel for 74 regions 2004-2009: 216

observations

– Fixed effects for regions and years• Linear specification

• Quadratic specification

– SUR

DataData

Dependent variable: Public goods provisionPublic goods provision

INPUTS- Education

- Public spending per capita in region

- Share of education in total public expenditures in region

- Health care- Public spending per capita in region

- Share of health care in total public expenditures in region

Source of Data: Rosstat

DataDataDependent variable: Public goods provisionPublic goods provision

OUTCOMES- Infrastructure

- share of paved roads - share of the paved roads with improved surface - density of paved roads

- Health care- infant mortality rate - total mortality rate

- Education- Score for Final state exam – not yet


DataDataDependent variable: Public goods provisionPublic goods provision

OUTPUTS- Education

- number of students per teacher - number of students per class - number of computers per 100 students

- Health care- number of inhabitants per doctor - number of inhabitants per a bed in public hospitals


BUT…BUT…

• Changing the share of spending on a public good might be due to increase of other kinds of spending

• Observations only for few years – It is hard to believe that mortality rate or quality of

education might be affected by policies for 2- 3 years

• Outputs as well as outcomes might be determined not by regional policies but federal policies – in Russia public health care is financed by regional

governments as well as federal government

DataDataIndependent variables: Political variablesPolitical variables

• Dummy for “new” bureaucrat/”old” bureaucrat

• Share of the ruling party among representatives elected by party list in regional legislature (S)

– Logarithm of the Herfindahl–Hirschman Index (HHI)

• Linear interaction term between the dummy and the share of the ruling party

– Linear interaction term between the dummy and HHI

• Quadratic interaction term between the dummy and the share of the ruling party

– Linear interaction term between the dummy and HHI

Source of Data: Central Election Commission of the Russian Federation, The Inter-Regional Electoral Network of Assistance in Russia

Political variables: Political variables: Elections in Elections in regional legislaturesregional legislatures

9

26

42

6374

0

20

40

60

80

2004 2005 2006 2007 2008

The share of the ruling partyThe share of the ruling party: Mean 50%

Max 92% (Tatarstan in 2004 -2008)

Min 17% (Amur region in 2005-2007)

Political variables: Political variables: GovernorsGovernors

74

5138

15 9

17

24

4038

1219

27

6

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008

elected governors old bureaucrats new bureaucrats

DataData

Independent variables: ControlsControls– Log total budget spending per capita

– Share federal budget transfers in regional budget

– Household income per capita


– Governors’ characteristics• Age

• Duration of keeping office

• Outsiders (non resident)/ insiders (resident)

• Politicians / businessmen

Source of Data: collected by author

Governors’ characteristicsGovernors’ characteristics

The share of the governors-outsiders

9% 10%16% 19% 22% 24%

30%34%

0%

10%

20%

30%

40%

2003 г. 2004 г. 2005 г. 2006 г. 2007 г. 2008 г. 2009 г. 2010 г.

The share of the governors with mostly political background (not businessmen)

92% 89% 81% 80% 78% 80% 78% 75%

0%

20%

40%

60%

80%

100%

2003 г. 2004 г. 2005 г. 2006 г. 2007 г. 2008 г. 2009 г. 2010 г.

Average duration of keeping office

66,5

77,5

8

2003 2004 2005 2006 2007 2008 2009 2010

years

Average age of governors

52,0

52,5

53,0

53,5

54,0

54,5

55,0

55,5

2003 2004 2005 2006 2007 2008 2009 2010

age

(yea

rs)

SpecificationSpecification

Yit - measure of public goods provision

Si(t-k) - share of the ruling party NGi(t-k) - dummy for governors-”new bureaucrats”

Xi(t-1) - set of control variables

αi and ρt - regions and year fixed effects

The effect of governors –”new bureaucrats” is defined by:

ittiktiktiitktiktiktitiit XSNGSNGSNGY 152

4321

2431 SS

Results: Quadratic specifications

spending per capita on share of spending on

health care

educationhealth care

education

Dummy for a new governor0.32

(1.59)

-6.50*

(3.61)

7.01**

(3.12)

3.39

(2.35)

Dummy for a new governor x share of the ruling party

1.57

(7.63)

43.03***

(17.28)

-24.27

(14.95)

-15.94

(11.26)

Dummy for a new governor x share of the ruling party2

-5.71

(7.42)

-52.63***

(16.82)

18.45

(14.55)

11.42

(10.96)

Time fixed effect yes yes yes yes

Regional fixed effect yes yes yes yes

Number of observations 216 216 216 216

Results: Linear specifications


health care education health care education

Dummy for a new governor

1.39

(0.76)

3.40*

(1.79)

3.54**

(1.50)

1.24

(1.13)


-4.22***

(1.28)

-10.28***

(3.00)

-5.58**

(2.52)

-4.37**

(1.89)




Results: Quadratic specifications


health care

educationhealth care

education

Dummy for a new governor0.32

(1.59)

-6.50*

(3.61)

7.01**

(3.12)

3.39

(2.35)


1.57

(7.63)

43.03***

(17.28)

-24.27

(14.95)

-15.94

(11.26)


-5.71

(7.42)

-52.63***

(16.82)

18.45

(14.55)

11.42

(10.96)




Max 41%

20% - 63%

Results: Outputs and outcomes

total

mortality rate

share of the paved roads

with improved

surfaces

students per class

Dummy for a new governor1.67***

(0.56)

1.80

(1.30)

-2.06*

(1.11)


-9.67***

(2.68)

-6.21***

(2.19)

6.62***

(2.25)


10.63***

(2.61)- -

Time fixed effect yes yes yes

Regional fixed effect yes yes yes

Number of observations 216 216 216

Results: Outputs and outcomes

total

mortality rate

share of the paved roads

with improved

surfaces

students per class

Dummy for a new governor1.67***

(0.56)

1.80

(1.30)

-2.06*

(1.11)


-9.67***

(2.68)

-6.21***

(2.19)

6.62***

(2.25)


10.63***

(2.61)- -

Time fixed effect yes yes yes

Regional fixed effect yes yes yes

Number of observations 216 216 216

Max 45 %

23% - 68%

Further workFurther work

• Reverse causality – IV approach

• a share of the ruling party in federal elections 2003, 2007 in a region;

• Putin/Medvedev’ share in President’s election in 2004, 2008

• Spending on infrastructure

does political competition matter for public goods provision? evidence from russian regions olga...

Documents

local elite slide

rosstat slide

big slide

public policies

old governor slide

total public expenditures

kinds of political competition

political competition