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Politics and banking in Russia: the rise of Putin

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  • Koen Schoors
  • Laurent Weill

Abstract

We investigate whether lending by the dominant Russian state bank, Sberbank, contributed to Vladimir Putin’s ascent to power during the presidential elections of March2000. Our hypothesis is that Sberbank corporate loans were used as incentives for managers at private firms to mobilize employees to vote for Putin. In line with our proposed voter mobilization mechanism, we find that the growth of regional corporate Sberbank loans in the months before the presidential election is related to the regional increase in votes for Putin and to the regional increase in voter turnout between the Duma election of December1999 and the presidential election of March2000. The effect is pronounced in regions where the governor is affiliated with the regime and in regions with extensive private employment, and less apparent in regions bequeathed with single-company towns, where voter intimidation suffices to get the required result. The results are highly robust.

Suggested Citation

  • Koen Schoors & Laurent Weill, 2020. "Politics and banking in Russia: the rise of Putin," Post-Soviet Affairs, Taylor & Francis Journals, vol. 36(5-6), pages 451-474, November.
    • Handle: RePEc:taf:rpsaxx:v:36:y:2020:i:5-6:p:451-474
    DOI: 10.1080/1060586X.2020.1785245
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    Citations

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    Cited by:

    1. Zuzana Fungáčová & Alexei Karas & Laura Solanko & Laurent Weill, 2023. "The politics of bank failures in Russia," Post-Soviet Affairs, Taylor & Francis Journals, vol. 39(6), pages 440-461, November.
    2. Fungáčová, Zuzana & Schoors, Koen & Solanko, Laura & Weill, Laurent, 2023. "Staying on top: Political cycles in private bank lending," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 899-917.
    3. Fungáčová, Zuzana & Karas, Alexei & Solanko, Laura & Weill, Laurent, 2022. "The politics of bank failures in Russia," BOFIT Discussion Papers 7/2022, Bank of Finland, Institute for Economies in Transition.
    4. Saibal Ghosh, 2023. "Political connections and bank behaviour," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 52(1), February.
    5. Osei-Tutu, Francis & Weill, Laurent, 2023. "Democracy favors access to credit of firms," European Journal of Political Economy, Elsevier, vol. 77(C).
    6. Fungáčová, Zuzana & Schoors, Koen & Solanko, Laura & Weill, Laurent, 2020. "Political cycles and bank lending in Russia," BOFIT Discussion Papers 8/2020, Bank of Finland, Institute for Economies in Transition.
    7. Fungáčová, Zuzana & Solanko, Laura & Weill, Laurent, 2025. "Lending is a political issue in Russia," BOFIT Policy Briefs 12/2025, Bank of Finland Institute for Emerging Economies (BOFIT).
    8. Fungáčová, Zuzana & Kerola, Eeva & Weill, Laurent, 2024. "European banks are not immune to national elections," BOFIT Discussion Papers 4/2024, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. Fungáčová, Zuzana & Schoors, Koen & Solanko, Laura & Weill, Laurent, 2020. "Political cycles and bank lending in Russia," BOFIT Discussion Papers 8/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
    10. Koetter, Michael & Popov, Alexander, 2018. "Politics, banks, and sub-sovereign debt: Unholy trinity or divine coincidence?," Discussion Papers 53/2018, Deutsche Bundesbank.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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