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Elites, institutions and culture as factors of economic development­

Priority areas of development: economics
2016
The project has been carried out as part of the HSE Program of Fundamental Studies.

Goal of research: analysis of major characteristics of the Russian bureaucratic elites and their performance results, as well as the study of the institutional environment that determines their performance framework and their norms and values.

The object of the research was the Russian bureaucratic elite, formal and informal institutions, and public norms and values in Russia. We focused mainly on Russia and its regions, but also conducted some cross-country comparative analysis.

Methodology: methods of new institutional economics and adjacent disciplines – political science and sociology; methods of data collection and data processing designed to solve problems of endogeneity and causality; field and natural experiments; case-studies.

Empirical base of research: Our research is founded on 4 databases collected by ICSID: 
1) Social and economic characteristics of the Russian regions
2) The biographies of the Russian elites (governors, vice-governors, etc.) – it is partly available at http://iims.hse.ru/csid/databases
3) Economic history of Russian regions
4) Vocational education in the Russian regions. These databases are being constantly updated and extended; most recent available data as well as new indicators were added to the datasets. We also used the data that we received from the surveys of Russian attorneys and of homeowners associations in 2014 and 2015.

Results of research: allowed us to get new insights into the study of political elites, social capital, collective actions and social policy, the role of history for modern institutions; they also let us update theories applicable to transition economies and developing countries. Modern mainstream literature is based on these theories that produce dozens of articles every year. On the contrary, thanks to the unique data we use, our research let us test well-known theories with regard to Russia. Thus, our research makes a significant contribution to the theory of economic development of transition economies.

First, within the topic of bureaucratic elites and economic growth, we studied how economic performance is used as a criterion for appointment of subnational officials, and how these bureaucrats are punished for poor economic growth. We find that subnational appointees are evaluated on the basis of economic performance in their jurisdiction, however, performance-based appointments are more frequent in less competitive regions. We also find that political centralization makes voters more critical of the ruling party. In cities where mayoral elections have been abolished, increasing unemployment is associated with reduced vote share for United Russia in regional elections. In cities where elections remain in place, however, we do not see indications that voters blame the ruling party for local economic performance.

In our research into economic growth we also studied spatial econometric models. Classic spatial econometric models make strong although simplifying assumption that the regional economic growth is dependent on the neighboring regions, and there is no variation in spillovers intensity across regions. We propose a modification of such models, i.e. we assume that some regions are more sensitive to spillovers than others. This means that a region surrounded by the fast-growing areas, will grow more intensely, the more its population density and the higher the level of urbanization.

Moreover, we examined the development of the legal community in Russia, its characteristics and role in reforming Russian institutions. We also proposed a theoretical framework to analyze attorneys’ associations.

Using the data from a field experiment of homeowners associations carried out in 2014 and 2015, we studied whether encouragement to join increase participation in local collective action, such as a homeowners association (HOA) and elections. We find that encouragement and increasing public awareness may have a positive effect on provision of public goods both on local and regional level. In this study we faced a major methodological issue caused by high levels of attrition in the endline survey. We propose a novel empirical approach that might be useful for studies, which like ours, encounter non-trivial levels of attrition at different stages.

We also considered historical roots of modern norms and values establishing a positive association between precommunist literacy and postcommunist democracy level of Russian regions. Unlike other studies, we find that the correlation between these two variables may be negative rather than positive.

Furthermore, we studied social policy preferences in poor institutional environment. Using laboratory experiments designed and conducted by us in Russia and the USA, we examine how poor institutions influence individuals support for redistribution, and find that high earners prefer more redistribution when they can more easily under-report their income.

Finally, a separate task of our work this year, as in 2015, was creation and extension of our databases. As mentioned above, ICSID now has four databases that we further developed in 2016, as well as our own survey data.

Additionally, we achieved some results as far as advancement of methodology is concerned. Notably, we were able to improve the collection of data on bureaucratic elites and professional education, and designed a methodology for gathering data on the development of Russian cities since the 19th century. We also proposed methods to deal with attrition of samples in field experiments and using methods of spatial econometrics.

Level of implementation,  recommendations on implementation or outcomes of the implementation of the results

Analysis of economic growth in Russian regions using methods of spatial econometrics and identifying growth factors have a key role in choosing well-balanced economic policies and evaluating effectiveness of investments in regional development.

Analysis of attorneys’ associations allowed us to establish the important part they play in institutional reforms and view the activity of professional legal organizations as factors in the transfer from limited access order to open access order.

Our results in the study of historical roots of Russian institutions contribute to a better understanding of quality of modern institutions and their possible improvement.

Finally, examination of social policy preferences let us come to a practical conclusion about the adjustment of preferences to institutional quality. It should be taken into account while planning social policies that poor institutions can alter how individuals perceive the benefits of redistribution, and high-earning individuals will prefer more redistribution when they can more easily evade taxes.

Publications:


Buckley N., Frye T. M., Gehlbach S., McCarthy L. Cooperating With the State: Evidence from Survey Experiments on Policing // Journal of Experimental Political Science. 2016. Vol. 3. No. 2. P. 124-139. doi
Libman A., Schultz A., Graeber T. Tax Return as a Political Statement // Review of Law and Economics. 2016. Vol. 12. No. 2. P. 377-445. doi
Яковлев А. А., Казун А. П., Ситкевич Д. Профессиональные организации как драйверы социальных изменений в развивающихся странах // Журнал институциональных исследований. 2016. Т. 8. № 3. С. 47-71.
Яковлев А. А., Казун А. П., Ситкевич Д. А. Профессиональные организации как драйверы социальных изменений в развивающихся странах / НИУ ВШЭ. Серия WP1 "Институциональные проблемы российской экономики". 2016.
Казун А. П. Положение российских адвокатов в правоохранительной системе: между кооперацией и противостоянием // В кн.: XVI Апрельская международная научная конференция по проблемам развития экономики и общества: в 4 кн. / Отв. ред.: Е. Г. Ясин. Кн. 1. М. : Издательский дом НИУ ВШЭ, 2016. С. 793-802.
Ivanov D. Human Capital and Knowledge-Intensive Industries Location: Evidence from Soviet Legacy in Russia // Journal of Economic History. 2016. Vol. 76. No. 3. P. 736-768. doi
Libman A., Kozlov V. A. The legacy of compliant activism in autocracies: post-Communist experience // Contemporary Politics . 2017. Vol. 23. No. 2. P. 195-213. doi
Borisova E. I., Govorun A. V., Ivanov D. Bridging or Bonding? Preferences for Redistribution and Social Capital in Russia / IMT School for Advanced Studies Lucca. Series EIC "EIC working paper series". 2016. No. 5/2016.
Yakovlev A. A., Kazun A., Sitkevich D.A. The Role of Lawyers in Social Changes in Developing Countries: Evidence from Russia / NRU Higher School of Economics. Series LAW "Law". 2016. No. 70.
Rochlitz M. Political Loyalty vs Economic Performance: Evidence from Machine Politics in Russia’s Regions / NRU Higher School of Economics. Series PS "Political Science". 2016. No. WP BRP 34/PS/2016 .
Govorun A. V., Marques II I., Pyle W. The political roots of intermediated lobbying: evidence from Russian enterprises and business associations // Business and Politics. 2016. Vol. 18. No. 4. P. 395-433. doi