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Public Employment and Redistributive Politics: Evidence from Russia’s Regions

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Author Info

  • Gimpelson, Vladimir

    ()
    (CLMS, Higher School of Economics, Moscow)

  • Treisman, Daniel

    ()
    (University of California, Los Angeles)

  • Monusova, Galina

    (Russian Academy of Science)

Abstract

Public employment grew surprisingly fast in Russia during the 1990s, at a time when total employment was falling. Most of this growth occurred in the country’s 89 regions, and rates varied among them. This paper seeks to explain this variation. Using panel data for 78 regions over 1992-1998 we test several hypotheses. We show that the increase in the share of public employment in total employment has been greatest where unemployment was highest and growing the fastest, in ethnically defined territorial units, and in regions which received larger federal transfers and loans. Regional governors appear to use public employment for several purposes: as a kind of economic insurance to cushion the population against unemployment; as a way of buying votes before elections; and, possibly, as a way of redistributing to minority ethnic groups. Their willingness to use it for any of these is conditioned by the level of federal financial aid they can attract. The paradoxical growth of public employment in Russia appears less a result of ignorant or irresolute central management than a perverse outgrowth of the competitive game of federal politics, in which regional governors use public sector workers as "hostages" to extract transfers.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 161.

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Length: 40 pages
Date of creation: Jun 2000
Date of revision:
Publication status: published as 'Fiscal Games and Public Employment: A Theory with Evidence from Russia' in: World Politics, 2002, 54 (2), 145-183
Handle: RePEc:iza:izadps:dp161

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Related research

Keywords: transition; Russia; wage arrears; Public employment; redistribution; regional governments; unemployment; trans-fers; wages;

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References

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  1. Alberto Alesina & Reza Baqir & William Easterly, 1998. "Redistributive Public Employment," NBER Working Papers 6746, National Bureau of Economic Research, Inc.
  2. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  3. Pierre-Richard Agénor, 1996. "The Labor Market and Economic Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 43(2), pages 261-335, June.
  4. Alberto Alesina & Stephan Danninger & Massimo Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," NBER Working Papers 7387, National Bureau of Economic Research, Inc.
  5. Jeffrey M. Davis & A. Cheasty, 1996. "Fiscal Transition in Countries of the Former Soviet Union," IMF Working Papers 96/61, International Monetary Fund.
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Cited by:
  1. Jeni Klugman & John Micklewright & Gerry Redmond & UNICEF - United Nations Children's Fund, 2002. "Poverty in the Transition: Social expenditures and the working-age poor," Innocenti Working Papers inwopa02/18, UNICEF Innocenti Research Centre.
  2. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," IZA Discussion Papers 245, Institute for the Study of Labor (IZA).
  3. Marta Curto-Grau, 2014. "Voters’ responsiveness to public employment policies," Working Papers 2014/19, Institut d'Economia de Barcelona (IEB).

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