Studying Institutions and Development in Russia: New Data and New Approaches conference
Conference Program
First Day: June 26
9:30: Welcome and Introduction
10.00 – 11.40. Panel 1.1. Regional Elite of the 2000s
Chairman: Daniel Treisman (UCLA)
- The Political Economy of Russian Gubernatorial Election and Appointment John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Noah Buckley (ICSID-HSE, Columbia University), Timothy Frye (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE)
- Bureaucratic Appointments in Hybrid Regimes John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Noah Buckley (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE)
- Cancellation of Mayoral Elections in the Russian Cities: Consequences for the Local Elites Noah Buckley (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE), John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Alexandra Shubenkova (HSE)
Discussants: Nikolai Petrov (HSE); Andrei Klimenko (HSE); Alexander Libman (Frankfurt School of Management and Finance)
Coffee Break
12.00 – 13.40 Panel 1.2. How Politics Influences Transfers and Investment
Chairman: Byung-Yeon Kim (Seoul National University)
- Substituting Growth for Money: Intergovernmental Transfers and Electoral Support in the Russian Federation, 2000-2008 Israel Marques (ICSID-HSE, Columbia University), Eugenia Nazrullaeva (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
- School of Hard Knocks: Economic Shocks, Transfers, and Strategic Priorities in Hybrid Regimes Timothy Frye (ICSID-HSE, Columbia University), Denis Ivanov (ICSID-HSE), Israel Marques (ICSID-HSE, Columbia University), Eugenia Nazrullaeva (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
- Policy Unfamiliarity: Political Uncertainty and Private Investment in Hybrid Regimes David Szakonyi (ICSID-HSE, Columbia University) and Eugenia Nazrullaeva (ICSID-HSE)
Discussants: Lev Freinkman (BP), Andrei Blokhin (MinFin); Mikhail Pryadilnikov (Moscow City Government); Alexander Muravyev (St. Petersburg State University / IZA)
Lunch
15.00 – 16.10 Panel 1.3. Collective Action, Informal Ties and Influence
Chairman: Victor Polterovich (Central Economic-Mathematical Institute of RAS)
- Getting Friendly with the Boss: Political Consolidation, Personal Connections, and the Choice of Lobbying Strategy Andrei Govorun (HSE), Israel Marques (ICSID-HSE, Columbia University), William Pyle (Middlebury College)
- Judicial Alignment and Criminal Justice: Evidence from Russian Courts Andre Schultz (Frankfurt School of Finance and Management), Vladimir Kozlov (HSE), Alexander Libman (Frankfurt School of Finance and Management)
Discussants: Timothy Frye (ICSID-HSE, Columbia University), Timur Natkhov (HSE)
Coffee Break
Round Table. 16.30 – 18.30: New Regional Elites and Incentives for Economic Development
Moderator: Lev Yakobson (HSE)
Invited Participants: Vladimir Drebentsov (BP), Ksenia Yudaeva (Kremlin Administration), Alexei Lavrov (MinFin), Oleg Fomichev (MoED), Alexander Pirozhenko (ASI), Victor Polterovich (Central Economic-Mathematical Institute of RAS), Andrei Yakovlev (ICSID-HSE), Mikhail Pryadilnikov (Moscow City Government)
Reception: 18:45-20:00
Second Day: June 27
10.00 – 12.10 Panel 2.1. Police and Society
Chairman: Timothy Frye (Columbia University / HSE)
- Cooperating With the State: Evidence from Survey Experiments on Policing Noah Buckley (ICSID-HSE, Columbia University), Timothy Frye (ICSID-HSE, Columbia University), Scott Gehlbach (ICSID-HSE, University of Wisconsin-Madison), Lauren McCarthy (University of Massachusetts-Amherst)
- Legal Conscience and Trust to Police Alexei Belyanin (HSE)
- Local Level Law Enforcement: Muscovites and their Uchastkovyi Lauren McCarthy (University of Massachusetts-Amherst, ICSID)
- Faking Performance Together: Systems of Performance Evaluation in Russian Enforcement Agencies and Their Interaction Effect on Processing of a Criminal Case Ella Paneyakh (European University at Saint-Petersburg)
Discussants: Vladimir Gimpelson (HSE); Michael Rochlitz (IMT Lucca)
Coffee Break
12.30 – 13.40 Panel 2.2. Business and Law
Chairman: Konstantin Sonin (New Economic School)
- Criminal Persecution of Business in Russian Regions: the Role of State Violence? Eugenia Nazrullaeva (ICSID-HSE), Alexey Baranov (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
- Corporate Raiding and the Role of the State in Russia Michael Rochlitz (IMT Lucca)
Discussants: Byung-Yeon Kim (Seoul National University); Galina Belokurova (University of Wisconsin-Madison)
13.40 – 14.00 Closing remarks
Abstracts
The Political Economy of Russian Gubernatorial Election and Appointment
John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Noah Buckley (ICSID-HSE, Columbia University), Timothy Frye (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE)
Political and economic outcomes depend, in part, on the quality of the officials making policy. Many scholars argue that the free and fair elections are the best method for selecting competent officials. Others, however, argue that elections can lead to the selection of amateurs, demagogues, and political sycophants. Under this view, sub-national officials should be appointed by centralized planners who are insulated from local popular pressure.
In this paper, we use original data on the biographies of Russian regional governors to determine whether the backgrounds of governors elected between 1992 and 2004 differ from the backgrounds of appointed governors post-2004. We find that the two groups are surprisingly similar on many dimensions. Elected and appointed governors have similar career backgrounds, ages, educational profiles, and ethnicities. But there are some important differences as well. Elected governors, are more likely to have held elected office and be from the region where they serve. Appointed governors are also more likely to be federal bureaucrats, hold a graduate degree, and have education in economics. Finding that the selection mechanism explains only a small portion of the variance in governor backgrounds, we conclude the paper by speculating on other possible explanations for variation in governor background.
Bureaucratic Appointments in Hybrid Regimes
John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Noah Buckley (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE)
Scholars associate bureaucratic quality with economic development. One particularly important component of a well-functioning bureaucracy is meritocratic promotion. The literature has attributed strong economic performance in a number of developing countries to performance-based cadre advancement policies in which high-level bureaucrats are held accountable for economic performance in their area of jurisdiction. By contrast, when bureaucratic appointments are made according to political criteria, economic performance is thought to suffer. Using data on the appointments of 8237 vice governors in Russia’s 89 regions this paper explores the conditions under which politicians in hybrid regimes appoint high-level bureaucrats on a political, as opposed to meritocratic, basis.
Cancellation of Mayoral Elections in the Russian Cities: Consequences for the Local Elites
Noah Buckley (ICSID-HSE, Columbia University), Guzel Garifullina (ICSID-HSE), John Reuter (ICSID-HSE, University of Wisconsin-Milwaukee), Alexandra Shubenkova (HSE)
After the federal law on local self-government was passed in 2003, elections of mayors have been cancelled in many Russian cities. The reform had a major impact on sub-federal fiscal relations, redistribution of public responsibilities and services between the levels of power, new delimitation of municipal territories, creation of new municipalities, etc. The reform of Russian municipalities presents an opportunity to study how the method of selection (direct elections or appointment) affects local elites. We use a novel database containing basic biographical information about the heads of all regional capitals as well as all cities with the population over 75 thousand for the period after 2000 (221 cities). Comparing basic characteristic of mayors who went through direct elections and any procedure of appointments, we draw conclusions about the influence that selections mechanisms at the local level have on elite qualities and behavior.
Substituting Growth for Money: Intergovernmental Transfers and Electoral Support in the Russian Federation, 2000-2008
Israel Marques (ICSID-HSE, Columbia University), Eugenia Nazrullaeva (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
Given limited resources and economic realities, how do politicians distribute monetary transfers in order to retain office? In this article, we argue that this decision is determined by economic factors, which condition politicians’ distributive strategies. In our model, we consider that politician and voters are involved in a repeated game, where past expectations condition future strategy. Where economic growth is good, politicians can distribute less to core supporters, who benefit from economic growth, and where it’s weak, however, politicians make transfers to their core supporters. We test our theory using data on federal transfers from the Russian Federal government to 78 Russian Regions in 2000–2008.
School of Hard Knocks: Economic Shocks, Transfers, and Strategic Priorities in Hybrid Regimes
Timothy Frye (ICSID-HSE, Columbia University), Denis Ivanov (ICSID-HSE), Israel Marques (ICSID-HSE, Columbia University), Eugenia Nazrullaeva (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
In the face of an economic shock, how do politicians allocate regional transfers? Do they favor transfers that primarily benefit the mass public or regional elites? Do political or economic factors influence the distribution of transfers during the crisis? To address these questions, we examine how the economic crisis of 2008-2009 shaped the allocation of funds to regional elites and mass groups in Russia. Whereas most existing literature on economic redistribution focuses on transfers to a single type of spending, we explore how central politicians shifted the mix of spending between and among regional elites and mass groups in Russia’s regions. We rely on fiscal data from 79 Russian regions and observe that during the financial crisis, federal spending on general transfers for the mass public rose, whereas funding for an important source of elite rents -- Federal Address Investment Programs (FAIP) -- declined. Economic factors, such as the change in industrial production, shape the distribution of transfers with regions harder hit by the shock receiving more transfers. At the same time, regions that voted in higher rates for United Russia in Parliamentary elections in 2007 received significantly higher transfers during the crisis. Thus, we find that both political and economic factors were at play in the distribution of transfers during the economic crisis.
Policy Unfamiliarity: Political Uncertainty and Private Investment in Hybrid Regimes
David Szakonyi (ICSID-HSE, Columbia University) and Eugenia Nazrullaeva (ICSID-HSE)
Do elections and appointments create uncertainty for investors in nondemocratic regimes? Recent works have uncovered strong relationships between polarized, competitive elections and declines in private fixed investment, but little work has been advanced about similar dynamics where elections are not free and fair. We argue that in nondemocratic regimes, turnover in leaders can indeed create uncertainty for private investors, but not through the conventional channels identified in democracies. Because noncompetitive elections and appointments transmit less information about future administrations, businessmen hold off on making investments until the policies of new leaders are actually announced and passed. We test our argument using an original dataset of 82 Russian regions from 2001-2009 that includes new data on investment-related policy and tax changes. Using the exogenous scheduling of election and appointment dates as instruments for turnover, we first find no relationship between potential changes in leadership and private fixed investment. However, potential turnover in leaders is positively associated with the introduction of legislative reforms one year later, which then drive down private investment during the year of implementation. Even when competition for higher office is reduced, investment still turns on political business cycles, though uncertainty is driven not by unpredictable election results, but by the policies that unfamiliar leaders implement upon arrival to office.
Getting Friendly with the Boss: Political Consolidation, Personal Connections, and the Choice of Lobbying Strategy
Andrei Govorun (HSE), Israel Marques (ICSID-HSE, Columbia University), William Pyle (Middlebury College)
How does political competition shape the way that firms pursue legislative change? A rich political economy literature describes various ways in which firms influence the design and enforcement of laws, rules and regulations germane to their business activities. Although helpful, this literature is disconnected from work on legislative accountability and political concentration. Making a distinction poorly developed in prior research, we contrast firms that choose to influence policy directly, through un-mediated contacts with executive and legislative branch personnel, and those that do so indirectly, through lobby groups acting as intermediaries. We propose a simple theory that relates the relative costs of lobbying and the strategies firms select to the extent of political competition and concentration. As competition increases and concentration decreases in a region, the use of indirect channels of lobbying becomes more attractive. Conversely, where competition is weaker or concentration greater, direct channels are preferred.
We test our theory using a survey of 1013 firms across 60 Russian regions. Exploiting substantial variation in political competition and concentration across Russia’s regions, we find evidence supporting our theory. Firms in politically competitive environments, where there is less concentration, are more likely to use business associations to influence their institutional environment. In less competitive environments, on the other hand, Russian firms more frequently report approaching government personnel directly. Using a survey of business associations, we show that these effects do not stem from variation in business association membership or characteristics across regions and that these results are robust to the tenure and work experience of regional governors.
Judicial Alignment and Criminal Justice: Evidence from Russian Courts
Andre Schultz (Frankfurt School of Finance and Management), Vladimir Kozlov (HSE), Alexander Libman (Frankfurt School of Finance and Management)
This paper investigates the effect of informal ties between court chairpersons and prosecutors on the repressive implementation of criminal justice in a judiciary with prosecutorial bias. We use criminal law statistics of Russian regional courts for 2006-2010 and determine the alignment between chairpersons and prosecutors by measuring the length of their mutual career paths. We study fraud convictions and find that judiciaries with longer alignment are more effective in implementing the prosecutor’s preference for court repressivity. This preference depends on federal incentives shaping the career prospects of prosecutors. If prosecutors expect benefits from higher court repressivity, aligned courts will sentence more defendants to prison, whereas, if incentives are absent alignment leads to less court repressivity.
Cooperating With the State: Evidence from Survey Experiments on Policing
Noah Buckley (ICSID-HSE, Columbia University), Timothy Frye (ICSID-HSE, Columbia University), Scott Gehlbach (ICSID-HSE, University of Wisconsin-Madison), Lauren McCarthy (University of Massachusetts-Amherst)
What factors affect citizens' willingness to cooperate with the state? We explore this question through a study of citizens' willingness to report crimes to the police, one of the quintessential forms of cooperation with the state apparatus. We develop a ``calculus of cooperation'' that highlights three sets of factors that potentially influence citizens' incentives to report a crime: benefits of cooperation received only if the crime is solved, benefits of cooperation received regardless of whether the crime is solved, and costs of cooperation. We evaluate the importance of these considerations using data from a set of survey experiments conducted in Russia in 2011-2012 .
Legal Conscience and Trust to Police
Alexei Belyanin (HSE)
Police is an important actor in the structure of all modern societies. In democratic countries, police interacts with and receives feedback from the citizens whose rights it is supposed to defend. An example of this is community-based policing, under which police performance is positively affected by the degree and quality of assistance provided by ordinary people. In this paper we state and explore the consequences of the opposite
statement: police can perform very poorly if citizens are lenient, and impose no restrictions on the police — in particular, are reluctant to require
full compliance to the rule of law. We formulate and explore stable (equilibrium) social outcome in a game between police officers and citizens, and
calibrate the model using the results of a representative citizens’ survey in Moscow, Russia in Winter 2011
Local Level Law Enforcement: Muscovites and their Uchastkovyi
Lauren McCarthy (University of Massachusetts-Amherst, ICSID)
The belief that personal experience with police at the local level can help enhance the effectiveness of and trust in the police has been the basis for a host of policing initiatives around the world. This paper explores community level policing in the Russian context by looking at Muscovites' assessments and interactions with their beat officers (uchastkovyi). Though they have undergone a number of reforms, the core functions of the uchastkovyihave largely remained the same since Soviet times: protecting citizens, keeping the peace and maintaining public order by dealing with minor crimes and administrative violations. They are viewed by the Russian state as an important bridge between the citizens and the police, which is especially important in the context of pervasive distrust of the police. Using survey and focus group data which suggests that Muscovites consider uchastkovyi to be a necessary institution, this project explores whether and how they could play a role in improving police-citizen relations in Moscow. It also explores the institutional structure that may limit the uchastkovyi from performing this role successfully.
Faking Performance Together: Systems of Performance Evaluation in Russian Enforcement Agencies and Their Interaction Effect on Processing of a Criminal Case.
Ella Paneyakh (European University at Saint-Petersburg)
Russian enforcement agencies are practically autonomous from external controls that would shape their everyday performance towards societally or governmentally imposed ends: law and order, crime control, or even systematic protection of political regime. High level of centralization leading to lack of feedback from local polities and communities; weak organizational culture unable to provide internal controls (partially due to quick turnover of personnel); and weak judicial system are main factors that allow enforcement agencies high levels of autonomy. As a result, routine activity of Russian enforcement agencies is being shaped by their internal systems of evaluation more than by any external pressures. In processing of a criminal case, officers from different agencies strategically bargain with each other balancing their ‘performance evaluation related’ interests at expense of other parties involved. They develop techniques of picking ‘right’ cases (and evading ‘wrong’ ones), manipulating charges depending on victim’s and defendant’s statuses as well as the ‘evaluation-related’ status of a specific charge, faking evidence and imposing pressures on defendants, victims and even courts, in order to achieve outcomes that suite ‘evaluation related’ needs of all enforcers involved.
This project is based on interviews with law enforcement professionals and judges, analysis of statistics and documents including the guidelines that regulate performance evaluation within Russian criminal police forces, investigative authorities and state prosecutors’ offices. It also shows that a similar quasi-evaluation system unofficially exists within Russian courts, forcing judges to comply with illegal practices of enforcement agencies by turning a blind eye to the deficiencies of prosecution’s position in court in order to avoid high appeal rates. Convictional bias of Russian criminal justice system is one well-known outcome of this bargaining-and-sorting process. Others include torture and illegal use of force by police, high latency of some types of crime, discrimination and corruption of justice.
Criminal Persecution of Business in Russian Regions: the Role of State Violence?
Eugenia Nazrullaeva (ICSID-HSE), Alexey Baranov (ICSID-HSE), Andrei Yakovlev (ICSID-HSE)
What explains the upward trend in economic crimes in Russia in the mid 2000s? Is it rent seeking behavior and private interests of law enforcement officials, or peculiar management practices of the police as a big enforcement agency? In this paper we empirically test the relationship between indicators of economic crimes in Russia’s regions, the level of economic activity, and turnover of regional elites. Our main goal is to find out whether private interests or the so-called “stick” reporting system (used for internal evaluation of subordinated police departments by top officials) are responsible for the overall upward trend in economic crimes observed in 2004 – 2009. We use a unique ICSID database, which contains official MVD’s (Ministry of Internal Affairs) data on economic crimes (according to the articles of the Russian Criminal Code) for Russian regions, along with biographical data for chiefs of regional police departments. Our results suggest that “stick” system based on key performance indicators is responsible for the intensifying upward trend in the dynamics of economic crime rates in 2004 – 2009, which overshadows negative consequences of predatory persecution practices.
Corporate Raiding and the Role of the State in Russia
Michael Rochlitz (IMT Lucca)
To what extent are Russian state agencies involved in predatory behaviour, and what are the determinants of their activities? Analysing a novel dataset containing 312 cases of illegal corporate raiding (reiderstvo) between 1999 and 2010, this paper identifies a shift both in the regional and sectoral distribution of raiding attacks over time, as well as an increasing participation of state agencies in illegal raiding attacks. Using panel regression analysis to look at the determinants of increasing state involvement, I find that election results for the ruling president and his party, as well as the degree to which elections are manipulated throughout Russia’s regions are significantly and positively correlated with the number of raiding attacks in a given region, while regions with governors that have stronger local ties are characterized by a smaller number of attacks. A potential interpretation of these findings is that the federal centre might tolerate a certain degree of predatory activities by regional elites, as long as these elites are able to deliver a sufficiently high level of electoral support for the centre, with the effect being weaker in regions where the governor is interested in the long-term development of the regional economy.