Career Concerns in a Political Hierarchy: A Case of Regional Leaders in Soviet Russia
AbstractWe study the nature of career concerns of regional leaders in Soviet Russia under Khrushchev and Brezhnev. We document a substantial over-time variation in career concerns associated with reforms of Soviet governing hierarchy. We demonstrate that Khrushchev’s “Sovnarkhoz” system—a unique episode in Soviet history, when a traditional Soviet unitary-form (U-form) hierarchy was replaced by a multidivisional-form (M-form) organization—created yardstick competition in industrial performance of regional leaders. High-powered career incentives, however, did not result in faster industrial growth on average. We find that only two groups of regional leaders performed better in response to increased incentives. 1) Leaders appointed during “Sovnarkhoz” were able to learn new rules better. 2) Leaders with good connections to their neighbors were able to overcome negative inter-regional externalities, a common byproduct of M-form. The lack of success of the “Sovnarkhoz” system triggered the separation of regional units along production branch lines, which, as we show, led to a substantial decrease of industrial growth rates. The failure of Khrushchev's management reforms together with the U-form lobby contributed to his dismissal and reinstatement of the U-form hierarchy under Brezhnev.
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Bibliographic InfoPaper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0040.
Length: 49 pages
Date of creation: Nov 2009
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Career Concerns; Political Hierarchy; Yardstick Competition; Soviet Economy;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-05 (All new papers)
- NEP-CDM-2009-12-05 (Collective Decision-Making)
- NEP-CIS-2009-12-05 (Confederation of Independent States)
- NEP-HIS-2009-12-05 (Business, Economic & Financial History)
- NEP-POL-2009-12-05 (Positive Political Economics)
- NEP-TRA-2009-12-05 (Transition Economics)
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