Dividing the spoils - pensions, privatization, and reform in Russia's transition
AbstractThe authors present a political economy model in which policy is the outcome of an interaction between three actors: government (G), managers and workers (W), and transfer recipients (P). The government's objective is to stay in power, for which it needs the support of either P or W. It can choose slow privatization with little asset stripping and significant taxation, thus protecting the fiscal base out of which it pays pensioners relatively well (as in Poland). Or it can give away assets and tax exemptions to managers and workers, who then bankroll it and deliver the vote, but it thereby loses taxes and pays little to pensioners (as in Russia). The authors apply this model to Russia for the period 1992-96. An empirical analysis of electoral behavior in the 1996 presidential election shows that the likelihood of someone voting for Yeltsin did not depend on that person's socioeconomic group per se. Those who tended to vote for Yeltsin were richer, younger, and better educated and had more favorable expectations for the future. Entrepreneurs, who had more of these characteristics, tended to vote for Yeltsin as a result, while pensioners, who had almost none, tended to vote against Yeltsin. Unlike Poland, Russia failed to create pluralist politics in the early years of the transition, so no effective counterbalance emerged to offset managerial rent-seeking and the state was easily captured by well-organized industrial interests. The political elite were reelected because industrial interests bankrolled their campaign in return for promises that government largesse would continue to flow. Russia shows vividly how political economy affects policymaking, because of how openly and flagrantly government granted favors in return for electoral support. Bur special interests, venal bureaucrats, and the exchange of favors tend to be the rule, not the exemption, elsewhere as well.
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 The World Bank in its series Policy Research Working Paper Series with number 2292.
Date of creation: 31 Mar 2000
Date of revision:
Public Health Promotion; Banks&Banking Reform; Municipal Financial Management; Economic Theory&Research; Environmental Economics&Policies; Economic Theory&Research; National Governance; Banks&Banking Reform; Municipal Financial Management; Health Monitoring&Evaluation;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Constant, Amelie F. & Kahanec, Martin & Zimmermann, Klaus F., 2006.
"The Russian-Ukrainian Political Divide,"
IZA Discussion Papers
2530, Institute for the Study of Labor (IZA).
- Amelie Constant & Martin Kahanec & Klaus F. Zimmermann, 2006. "The Russian-Ukrainian Political Divide," Discussion Papers of DIW Berlin 656, DIW Berlin, German Institute for Economic Research.
- Constant, Amelie & Kahanec, Martin & Zimmermann, Klaus F, 2007. "The Russian-Ukrainian Political Divide," CEPR Discussion Papers 6085, C.E.P.R. Discussion Papers.
- Marek Gora & Grzegorz Kula & Oleksandr Rohozynsky & Magdalena Rokicka & Anna Ruzik, 2009.
"Social Security, Labour Market and Restructuring: Current Situation and Expected Outcomes of Reforms,"
CASE Network Reports
0090, CASE-Center for Social and Economic Research.
- Marek Gora & Grzegorz Kula & Magdalena Rokicka & Oleksandr Rohozynsky & Anna Ruzik, 2008. "Social Security, Labour Market and Restructuring: Current Situation and Expected Outcomes of Reforms," ESCIRRU Working Papers 5, DIW Berlin, German Institute for Economic Research.
- John Marangos, 2002. "A post Keynesian critique of privatization policies in transition economies," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(5), pages 573-589.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.