M-form hierarchy with poorly-diversified divisions: a case of Khrushchev’s reform in Soviet Russia
AbstractWe test the premise of the theoretical literature that M-form political hierarchies are effective in creating yardstick competition between regional divisions only when divisions have sufficiently diversified or similar industrial composition. The reason is that the competition among poorly-diversified inter-related divisions creates incentives for regional leaders to pursue policies that hurt growth of the neighboring regions in order to make their own region look better from the point of view of the center. We use a unique episode in Soviet history, when a traditional Soviet unitary-form (U-form) hierarchy was replaced by a multidivisional-form (M-form) organization, namely, the Khrushchev’s 'Sovnarkhoz' reform. First, we demonstrate that during this reform regional leaders were subjected to relative performance evaluation which created career concerns to generate industrial growth. Second, we show that these career concerns resulted in higher growth in regions with sufficiently diversified and, therefore, self-contained economies and resulted in lower growth in highly specialized regions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8221.
Date of creation: Feb 2011
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Markevich, Andrei & Zhuravskaya, Ekaterina, 2011. "M-form hierarchy with poorly-diversified divisions: A case of Khrushchev's reform in Soviet Russia," Journal of Public Economics, Elsevier, vol. 95(11), pages 1550-1560.
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ye Chen & Hongbin Li & Li-An Zhou, 2005.
"Relative Performance Evaluation and the Turnover of Provincial Leaders in China,"
00010, Chinese University of Hong Kong, Department of Economics.
- Chen, Ye & Li, Hongbin & Zhou, Li-An, 2005. "Relative performance evaluation and the turnover of provincial leaders in China," Economics Letters, Elsevier, vol. 88(3), pages 421-425, September.
- Ruben Enikolopov & Ekaterina Zhuravskaya, 2004.
"Decentralization and Political Institutions,"
Economics Working Papers
0045, Institute for Advanced Study, School of Social Science.
- Ruben Enikolopov & Ekaterina Zhuravskaya, 2006. "Decentralization and Political Institutions," Working Papers w0065, Center for Economic and Financial Research (CEFIR).
- Enikolopov, Ruben & Zhuravskaya, Ekaterina, 2003. "Decentralization and Political Institutions," CEPR Discussion Papers 3857, C.E.P.R. Discussion Papers.
- Musgrave, Richard A, 1969. "Theories of Fiscal Federalism," Public Finance = Finances publiques, , vol. 24(4), pages 521-36.
- Cai, Hongbin & Treisman, Daniel, 2004. "State corroding federalism," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 819-843, March.
- Fisman, Raymond & Gatti, Roberta, 2002.
"Decentralization and corruption: evidence across countries,"
Journal of Public Economics,
Elsevier, vol. 83(3), pages 325-345, March.
- Fisman, Raymond & Gatti, Roberta, 2000. "Decentralization and corruption - evidence across countries," Policy Research Working Paper Series 2290, The World Bank.
- Lazarev, Valery & Gregory, Paul, 2003. "Commissars and cars: A case study in the political economy of dictatorship," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 1-19, March.
- Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
- repec:aea:jeclit:v:43:y:2005:i:3:p:721-761 is not listed on IDEAS
- Victor Chernozhukov & Ivan Fernandez-Val & Jinyong Hahn & Whitney Newey, 2009.
"Identification and estimation of marginal effects in nonlinear panel models,"
CeMMAP working papers
CWP05/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Victor Chernozhukov & Ivan Fernandez-Val & Jinyong Hahn & Whitney Newey, 2008. "Identification and estimation of marginal effects in nonlinear panel models," CeMMAP working papers CWP25/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Victor Chernozhukov & Ivan Fernandez-Val & Jinyong Hahn & Whitney Newey, 2009. "Identification and Estimation of Marginal Effects in Nonlinear Panel Models," Boston University - Department of Economics - Working Papers Series wp2009-b, Boston University - Department of Economics.
- Eric Maskin & Yingyi Qian & Chenggang Xu, 1999.
"Incentives, Information, and Organizational Form,"
99009, Stanford University, Department of Economics.
- Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
- Qian, Yingyi & Xu, Chenggang, 1993. "The M-form hierarchy and China's economic reform," European Economic Review, Elsevier, vol. 37(2-3), pages 541-548, April.
- Alfred D. Chandler, 1969. "Strategy and Structure: Chapters in the History of the American Industrial Enterprise," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530090, January.
- Guriev, Sergei & Yakovlev, Evgeny & Zhuravskaya, Ekaterina, 2010.
"Interest group politics in a federation,"
Journal of Public Economics,
Elsevier, vol. 94(9-10), pages 730-748, October.
- Yingyi Qian & Gerard Roland & Chenggang Xu, 2006. "Coordination and Experimentation in M-Form and U-Form Organizations," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 366-402, April.
- Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
- Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
- Marina Dodlova, 2013. "Political Accountability and Real Authority of Government Bureaucracy," CESifo Working Paper Series 4443, CESifo Group Munich.
- Pierre Salmon, 2013. "Decentralization and growth: what if the cross-jurisdiction approach had met a dead end?," Constitutional Political Economy, Springer, vol. 24(2), pages 87-107, June.
- Pierre Salmon, 2013. "Horizontal competition in multilevel governmental settings," Working Papers hal-00830876, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.