Research event

Devolution, local efficiency, and resource allocation: Evidence from Russian cities

Local officials in non-democratic regimes are accountable upwards, to the centre, and downwards, to the local population. This paper compares elected and appointed mayors in contemporary Russia. It leverages the federal regulation to phase out local elections, which allows for the application of the difference-in-differences methodology. The empirical analysis is based on a new budget dataset for 463 Russian cities and over 9 million city-level public procurement purchases. The paper focuses on three outcomes: taxation, efficiency in procurement and distribution of procurement contracts to local versus non-local firms. Information about a future change from selection by election to the selection by appointment makes mayors spend more, tax more, be less efficient and divert more municipal contracts to non-local suppliers. These results are amplified in cases with elected governors, who are more likely to monitor mayors' behaviour. The selection rule explains the heterogeneity of fiscal outcomes through differences in the local officials' incentives. Subnational elections in non-democracies incentivize local politicians to be more efficient, but mostly to preserve their positions in the office.

This event is part of the Political Economy Lunch Seminar (PELS).

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