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Institutions and Economic Development: Analysis of Causal Relationships

Priority areas of development: economics, management
2020

Object of Research

The goal of the project was to carry out an integrated portfolio of studies using common or similar methodologies and databases, to investigate the impact of institutions on the state of economy and society, and to study causal links underpinning such impact, including the role of culture and social capital.

Main research problems studied in the above portfolio were as follows: 

  • Conduct a comparative analysis and assessment of policy decisions of Russian regional administrations to mitigate the coronavirus pandemics in Russia, and to support regional economies and population, and to study behavior in the society during the pandemic.

  • To develop and test new corruption measurement methods and use those to assess the impact of corruption in government services and agencies

  • To explore the impact of segregation and fractionalization in multi-ethnic communities on municipal governance and norms and values in the society

  • To assemble a new regional-level database for economics studies of the Russian Empire in the 1861-1913 period, and use the assembled data to explore the nature of economic growth in Russia in relation to human capital accumulation in the country

  • To study empirically the implications of institutional reforms for international mobility of the population

  • To study outsourcing of government functions to the nonprofit sector in the context of co-production of public goods and services.

To address the above problems, the project research team supported by a grant from the basic Research Foundation of the HSE carried out the following studies:

  • Regional measures to mitigate the COVID-19 pandemics and its implications

  • Empirical corruption measures based on distribution of automobile license plates in Russia

  • Quality of institutions and visa barriers

  • Historical factors of human capital accumulation: The case of the Russian Empire in the 1861-1913 period

  • Impact of decentralized corruption on corruption burden and access to public production inputs

  • Impact of ethno-linguistic fractionalization and spatial segregation on municipal governance and cultural convergence: The case of Estonia

  • Other studies (outsourcing of public goods and services to nonprofit organizations; self- isolation and mobility of Moscow population during the COVID-19 pandemics; “creative spaces” in the urban context; political institutions and innovations in transition economies) ).

Methods of analysis

In the above studies, modern theoretical concepts and models of institutional economics and political economy were combined with various tools of empirical research, including econometric models.

Empirical base of the project

The project made use of multiple data sources, including surveys, historical data, official statistical materials, and information available from various research institutions.

Project results

Main results of theimplementedstudiesareasfollows.

  1. Comparative analysis of regional policies to contain and mitigate the COVID-19 pandemic and to support local economics and population was implemented

  2. New corruption measures based on objective data are derived; these measures are shown to be correlated with the performance of affected government agencies

  3. A new empirical strategy was implemented to prove a significant causal link between national institutions and visa barriers

  4. Patterns of economic growth in the Russian Empire were studied using a unique regional-level statistical database

  5. A new theoretical model revealed the impact of decentralized corruption on the corruption burden and access to public production inputs; model predictions are confirmed empirically using an extended enterprise survey database

  6. The impact of ethno-linguistic fractionalization and segregation on governance was demonstrated at the micro-level of municipalities and settlements

  7. The impact on political institutions on innovations in transition economies has been described

  8. Factors underpinning the scale of outsourcing of public services to the non-profit sector have been identified

  9. Variations of self-isolation and mobility restrictions in the city of Moscow during the COVID-19 pandemic were studied

The above studies highlight general patterns of the interplay between institutions and economic development. They contribute to the institutional theory and could be relevant for institutional and policy reform.

Implementation

Project materials have been published or are being prepared for publication in academic journals, were presented at various academic seminars, and are used in a number of courses offered at the HSE University.

Publications:


Гончаров Г. И., Натхов Т. В. Текстуальный анализ ценообразования на рынке московской жилой недвижимости // Экономический журнал Высшей школы экономики. 2020. Т. 24. № 1. C. 101-116. 
Vaskin I. Buying Loyalty Of Voters Or Local Elites? Political Alignment And Transfers To Provinces In Tutelary Regimes: The Case Of Iran / Издательский дом НИУ ВШЭ. Series PS "Political Science". 2020. No. 73.