Research Seminar on Diversity and Development
- International Center for the Study of Institutions and Development (ICSID), Higher School of Economics
- Center for the Study of Diversity and Social Interactions (CSDSI), New Economic School
- Andrei Yakovlev, Director of ICSID, Professor
- Shlomo Weber, Rector of NES, Professor, Academic Head of CSDSI
First seminar: February 3, 2015
Frequency: twice a monthSpeakers: ICSID and CSDSI team members, and invited guests
Public attribution of responsibility in autocracies: Evidence from Russia
Georgiy Syunyaev (Columbia University)
Abstract: Correct attribution of responsibility for economic outcomes is one of the key assumptions underlying citizens’ ability to hold politicians accountable: Correct attribution allows citizens to use punishment and reward strategies to discipline politicians and to prevent them from introducing policies that contravene the preferences of the electoral majority (Ferejohn, 1986; Fiorina, 1981). Even in contexts with formal, legal mechanisms of accountability and a putatively free media, citizens often fail to correctly punish and/or reward politicians for economic performance. Among the reasons for the absence of correct blame attribution—even in its most propitious circumstances—scholars highlight scarce or biased information (Alcañiz and Hellwig, 2011), perceptual biases of voters (Bullock, 2011), and diffuse structures of responsibilities in multilevel governments (Malhotra and Kuo, 2008; Reuter and Beazer, 2016).
This study examines whether and how contents of media reporting affect citizens’ perception of public policy outcomes, responsibility for those outcomes and evaluation of the politicians in non-democratic context in 4 Siberian regions of Russia: Novosibirsk, Irkutsk, Kemerovo and Krasnoyarsk. I analyze data from an original survey experiment in which respondents are asked to watch video excerpts from "Rossia 1" news reports that aim to inform citizens about responsibility for recent policy outcomes. Respondents are then asked to evaluate the outcomes of various economic policies as well as performance of different levels of government. The design allows me to learn whether popularity of the government in countries without strong democratic traditions and vibrant media can be predicated on strategic and potentially biased framing of the news. One unique feature of this study is its on allocation of responsibility between multiple tiers of the government. This feature allows me to test ability of citizens to correctly attribute responsibility in multi-level government structures — important but empirically understudied aspect of political accountability in comparative context.
Sex, Language and Financial Inclusion
Laurent Weill (University of Strasbourg)
Abstract: Reference to gender in language can lead individuals to draw distinctions between genders and reinforce traditional views of gender roles. To test our hypothesis that language gender-marking exerts an influence on the gender gap in financial inclusion, we draw on data for 117 countries in the World Bank’s Global Findex database and perform logit estimations at the individual level. We find the gender gap in the probability of owning a formal account, having access to a formal credit, as well as having savings in a formal financial institution is higher for countries with gendered languages than for countries with genderless languages. These findings are confirmed in robustness checks that control for alternative measures of culture and estimations at the country level.
Diseases, diversity, and out-group attitudes: Evidence from 2014-2016 Ebola outbreak and historical pathogen prevalence
Alexander Yarkin (Brown University)
Abstract: In this paper, I explore the persistence and change in the attitudes towards diversity – people’s views on various out-group members based on ethnic, racial, linguistic, cultural and other identity lines. Specifically, I address the role of historical disease prevalence and contemporary epidemics in shaping these attitudes. First, I utilize the historical data on the prevalence of several infectious diseases to show that larger risks of contracting a novel pathogen historically map into worse out-group attitudes today. This result holds for various measures of out-group attitudes and several identification strategies. Second, I explore the case of West African Ebola outbreak in 2014-2016 to show that, indeed, an exposure to a larger Ebola shock leads to lower national, as opposed to ethnic, identity at the local level. However, there exists a large heterogeneity in the effects of Ebola: people living in regions that (i) were more ethnically diverse, and (ii) had more trust in strangers to begin with, actually show an increase in their national identity. Thus, massive social shocks, such as deadly epidemics, may increase polarization in social attitudes.
Does Experience of Banking Crises Affect Trust in Banks?
Zuzana Fungáčová (Bank of Finland)
Abstract:This paper investigates how past experience with banking crises influences an individual’s trust in banks. We combine data on banking crises for the period 1970–2014 with individual data on trust in banks for 52 countries. We find that experiencing a banking crisis diminishes a person’s trust in banks, and that high exposure to banking crises is negatively related to trust in banks. An individual’s age at the time of the crisis is important, and significant for individuals between 41 and 60 years of age at the time of the banking crisis. Both severe and mild crises diminish trust in banks, but a severe banking crisis hits also young people’s trust, while less severe banking crises mainly degrade trust of more mature people. The detrimental effect for trust in banks seems to be connected specifically to systemic banking crises. Other types of financial crises incur a less significant effect. Overall, our results indicate that banking crises generate previously unrecognized costs for the economy in the form of a lasting reduction of trust in banks.
Institutional Constraints on Coalition Formation
Evgeny Sedashov (HSE)
Abstract: As Strøm, Budge, and Laver convincingly argue in their 1994 article, political parties face a number of hard and soft institutional constraints in the process of government formation. Even though empirical models of coalition formation have since then regularly included institutional variables, they do not give justice to this idea as they tend to ignore the implicit interactivity of the effects of institutional and non-institutional factors. In this paper, we remedy this issue by employing the constrained choice conditional logit model (Moral and Zhirnov, 2018). We model coalition formation as a two-step process. The first step produces a set of institutionally viable potential government coalitions and is informed by the electoral outcomes, the rules of coalition formation, legislative institutions, and pre-electoral alliances. The second step determines which of these viable coalitions is installed; it is informed by the ideological and policy proximity among potential coalition partners. Our findings suggest that the factors related to the institutional viability of a proto-coalition do not only exert a direct effect on the success of that coalition, but also condition the process of policy bargaining within viable proto-coalitions.
When and why is language salient for sovereignty? Evidence from Russia
Kyle Marquardt (HSE)
Abstract: While identity-based cleavages have played a role in many important regional sovereignty movements, the conditions under which a particular form of identity becomes salient are poorly understood. In this article I develop and empirically examine a theoretical framework for understanding when a particular form of identity is likely to become salient for support for sovereignty, focusing on three conditions: 1) a territorial context conducive to regional sovereignty, 2) the presence of an identity difference, and 3) a plausible link between greater regional sovereignty and higher status for individuals who possess the relevant identity-based attributes. I examine these conditions by analyzing the relationship between linguistic differences and support for regional sovereignty in Russia in the 1990s, using two sets of survey data. The first data set includes data from 30 regions, which vary across all three conditions, and find tentative evidence that indicates the importance of all of them: respondents in autonomous regions were more supportive of sovereignty, as were respondents in these regions who spoke a peripheral language, though the relationship between language and support for sovereignty varies across these regions. I use finer-grained survey data from 16 Russian autonomous republics to empirically analyze the third condition in greater detail. These regions fulfill the first two conditions and are thus likely cases in which language will be salient. However, their linguistic demographics vary widely, and thus the likelihood that regional sovereignty will increase the status of peripheral languages. I find that proficiency in a peripheral language tends to be more salient for separatism in regions with a relatively high proportion of peripheral language speakers, lending credence to the importance of the third condition.
Strategic voting and turnout
Alexei Zakharov (HSE). Co-authors: Kivanc Akoz (HSE).
Abstract: Elections with multiple candidates often feature a single pro-government as well as multiple oppositon candidates, with the opposition electorate being polarized between various opposition camps.In our work, we use a strategic voting model to study the effect of this polarization on turnout and candidate chances of winning. We find that the effect cruciually depends on whether the opposition voters coordinate on one of the candidates. In that case, polarization decreases turnout and the probability of opposition candidate winning; however, if the opposition voters vote sincerely, polarization can increase turnout due to a smaller free-ride effect.
Hotelling-Downs Equilibria: Moving Beyond Plurality Variants
Alexander Karpov (HSE, ICS). Co-authors: Omer Lev (Ben-Gurion University, Israel), Svetlana Obraztsova (Nanyang Technological University, Singapore).
Abstract: Hotelling-Downs model is a classic model of political competition and strategizing candidates, almost always analyzed under plurality. Our paper presents a three-pronged development of the Hotelling-Downs model. First, we analyze competition under a variety of voting rules. Second, we consider not only a linear city model, but also a circular city model. Third, unlike most Hotelling-Downs papers, we solve the model under the winner-takes-all assumption, which saves many equilibria, and is more relevant to voting settings.
Ambiguous Policies and Correlated Preferences
James Tremewan (Auckland University). Co-authors: Juha Tolvanen (Auckland University) и Alexander Wagner (Auckland University).
Abstract: There are many popular accounts of candidates winning elections with markedly ambiguous platforms. Clear empirical evidence regarding ambiguous platforms as well as the reasons for their attractiveness is however quite limited. We test a novel mechanism that explains the success of ambiguous platforms in an equilibrium model with fully rational players. In a citizen-candidate model of electoral competition, we show that if policy preferences are correlated in a society, this correlation can lead candidates to run on ambiguous platforms and voters to support them. In a laboratory experiment, we show that when voters' and candidates' preferences are correlated, ambiguous platforms gain notable support and can even win elections. Moreover, leveraging on the heterogeneity of cognitive ability of players in the game, we provide direct support for the underlying mechanism which drives the use and support of ambiguous platforms.
Why Does Persistance Happen (and Not)? A Model of Institutions and Culture in Long-Run Economic Development
Aleksandr Demin (New York University)
Abstract: Recent studies have convincingly shown that history matters for long-run development through various mechanisms whenever it is observed. What are the conditions for a decision to have persistent effects? I develop a theory of how formal political institutions and cultural transmission contribute to long-run effects. In the model, citizens select contributions to private and public goods, while the political elite decides on the expropriation and enforcement of public goods provision. The game is played in two periods with a stochastic social transformation occurring in between. First, the model shows how initially weak institutions contribute to the negative developmental effects. Second, the conditions for the persistence of cooperation on public goods with imperfect information are characterized. Importantly, transmission of beliefs works together with enforcing institutions, sustaining each other.
The Puzzling Politics of R&D: Signaling Competence through Risky Projects
Natalia Lamberova (UCLA)
Abstract: Why do some leaders devote significant funds to research and development (R&D) even though such investments are risky, less visible to the public than many other investments, and typically bear fruit only after the incumbent has already left office? This paper suggests that investing in R&D improves the incumbent’s perceived competence among voters. Using a formal model of signaling, survey experiments conducted in the US and Russia, and corroborating cross-country evidence, I demonstrate that investment in R&D improves perceptions of incumbent competence and approval of the government among the citizenry.
The role of markets and preferences on resource conflicts
Petros Sekeris (Montpellier Business School)
Abstract:: We develop a generalized theory of resource conflict. We demonstrate that the existence of a resource curse (or blessing) relies on two fundamental elements: (i) market conditions; and (ii) agents’ preferences. When resource prices are treated as exogenous, we obtain the conventional result, where an increase in the value of the resource rent (lower opportunity cost of appropriation) increases conflict. However, when the price of the contestable resource is endogeneously set (i.e., locally determined) or if markets do not exist, we find the opposite result may hold depending on the nature of agents’ preferences: conflict can increase when the contestable resource becomes scarcer. Our article therefore identifies a fundamental transmission mechanism in resource conflicts.
Social Media and Xenophobia: Evidence from Russia
Ruben Enikolopov (NES)
Abstract: We study the causal effect of social media on hate crimes and xenophobic attitudes in Russia using quasi-exogenous variation in social media penetration across cities. We find that higher penetration of social media led to more hate crimes, but only in cities with high baseline level of nationalist sentiment prior to the introduction of social media. Consistent with a mechanism of coordination of crimes, the effects are stronger for crimes with multiple perpetrators. Using a list experiment embedded in a new, national survey, we show that social media penetration also had a persuasive effect on young and low-educated individuals, who became more likely to have xenophobic attitudes. Remarkably, we see no evidence of social media increasing people's willingness to express xenophobic views outside social media, which suggests that social media, if anything, increased the stigma associated with expressing these views. Our results are consistent with a simple model of social learning where penetration of social networks increases individuals' propensity to meet like-minded people.
Redistributive policy and redistribution preferences: The effects of Moscow redevelopment program
Alexey Zakharov (HSE) and Israel Marques, research fellow of ICSID (HSE)
Abstract: We study a unique dataset of 1400 Moscow residents in order to estimate the effect of participating in a government-sponsored redevelopment program on preferences for redistributive social policy. We find that there is a positive effect: Individuals in buildings slated for redevelopment are more likely to agree that government should reduce income differences between rich and poor, provide for unemployed, and provide housing to everyone who needs it. We believe that the primary channel is through increased trust in the government. Our results suggest yet another pathway the copersistence of redistribution preferences and redistributive state policies.
The Agricultural Origins of Gender Norms
Vladimir Zabolotskiy (HSE).
Abstract: This paper investigates the origins of cultural differences in gender norms. I test the hypothesis that transition towards agriculture contributed to the gender-based division of labor, consecutive exclusion of women from economic and political life, and gender inequality. I use sustainable genetic markers – Y-DNA haplogroups – associated with the spread of agriculture in Europe as a proxy for agricultural ancestral way of life. I find that regions, where the agricultural ancestry is more common than that of hunter-gatherers, have lower female labor force participation rates and higher gender inequality. Residents of these regions are also more likely to have gender-discriminatory attitudes towards females, and women living there are less likely to be employed. In contrast, regions, where the hunting-gathering ancestry prevails, have lower gender inequality and residents of these regions are less gender-biased. This opens up a field for discussion of how the issues of women’s agency should be addressed in regions with different agricultural past to achieve higher gender equality.
Economic growth with worker cooperatives
Francesco Caselli, The London School of Economics. Co-author: Thomas Brzustowski.
Abstract: Persistent increases in inequality, together with stagnation of living standards for large sections of the population, have fuelled political support for alternatives to capitalist enterprises. In this paper we study the dynamic properties of an economy based on worker cooperatives, and compare them qualitatively and quantitatively with the properties of (standard) economies based on capitalist enterprises.
Determinants of preferences for honesty
JohannesAbeler, Oxford University
Abstract: Reporting private information is a key part of economic decision making. A recent literature has found that many people have a preference for honest reporting, contrary to usual economic assumptions. In this paper, we investigate what determines these preferences. We experimentally measure preferences for honesty in a sample of children. We first document several correlations between a child’s reporting behaviour and parents’ characteristics. We then provide causal evidence on the effect of the social environment by randomly enrolling children in a year-long mentoring program. We find that, almost four years after the end of the mentoring program, mentored children are significantly more honest.
All Along the Watchtower: Defense Lines and the Origins of Russian Serfdom
Timur Natkhov, senior research fellow of Center for Institutional Studies (HSE).
Abstract : Why did Russian state introduced serfdom for its previously free peasants, at the time when Western Europe was undergoing the opposite direction? In this paper we empirically test two prominent theories of Russian serfdom - Domar's (1970), who argued that low population density was the primary reason for serfdom, and Hellie's (1971), who stressed the role of military class, arguing that serfdom ensured stable supply of the army to compensate for the low fiscal capacity of the state. To discriminate between the theories we employ, for the very first time, unique data on the structure and spatial distribution of the Russian population in late 17-th century. We show that the highest proportion of serfs in 1678 was on the Tula fortification line (Tul’skaya zasechnaya cherta), which was the first in a sequence of defense lines built to protect the southern frontier against the nomad raids. The location of other types of peasants (free, church, state) was not associated with the defense line. To deal with possible endogeneity, we deploy spatial methods and terrain data to calculate optimal invasion routes for nomads, and optimal location of the defense line to block the raids. Using it as an instrument for the actual defense line we confirm our OLS estimations. We also test statistically the mechanism of the enserfment - small land plots along the southern frontier were granted by the government to high ranked solders in exchange for military service. Using data on Russian landowning elites of the late 17-th century we show that small estates (up to 5 peasant households, which is sufficient to support one solder and his family) were disproportionately concentrated in regions on the Tula defense line. Overall, the data do not support Domar's predictions, but favor, with some modifications, Hellie's insight about the origins of Russian serfdom.
Collective choice and the fragmentation of views
Arseniy Samsonov (UCLA).
Abstract: People tend to get political information from the media that shares their ideology. Does this lead to worse decisions than the case in which everyone uses all the media sources? To answer this question, I build a game-theoretic model that involves signaling and collective choice. The model shows that the latter situation is only better if people have close political preferences and strongly want to coordinate with each other; otherwise, the former scenario is better.
Implementation by vote-buying mechanisms
Dimitrios Xefteris, University of Cyprus. Co-authour: Jon Eguia (Michigan State University).
Abstract: Simple majority voting does not allow preference intensities to be expressed. A vote-buying mechanism, instead, permits preference intensities to be revealed since each agent can buy any quantity of votes x to cast for an alternative of her choosing at a cost c(x) and the outcome is the most voted alternative. In the context of binary decisions, we characterize the class of choice rules implemented by vote-buying mechanisms. Rules in this class can assign any weight to preference intensities and to the number of supporters for each alternative.
Political Economy of Cross-Border Income Shifting: A Protection Racket Approach
Maxim Ananyev, Research fellow at the The University of Melbourne
Abstract: Multinational firms often shift their incomes to low-tax jurisdictions, thus robbing host states of tax revenue. I offer a new theory to explain why some firms do this while others do not. I argue that firms that are more vulnerable to government expropriation are, counterintuitively, less likely to shift income offshore, since complying fully with tax law gives the government a greater stake in their survival. Analyzing a registry-based panel data on multinational firms, their tax burdens, and a cross-sectional information of the firms’ connections to tax havens, l find that, other things equal, firms with more concentrated fixed assets are less likely to use havens. These results challenge existing theories of the political economy of development. Whereas the “Pillars of Prosperity” theory suggests that successful states simultaneously develop protection of property rights and fiscal capacity, my results show that perfect property rights protection can actually undermine the state’s ability to tax. In a world of frictionless international capital flows, some level of expropriation risk may be necessary to prevent a fiscal crisis due to evasion.
Landed Elites and Education Provision in England: Evidence from School Boards, 1871-1899
Marc Goñi, Assistant Professor at the
Abstract: This paper studies the relationship between landownership concentration and human capital in nineteenth-century England. Using newly compiled data on a wide range of education measures for 40 counties and 1,387 local School Boards, I show a negative association between land inequality, state-sponsored education, and human capital accumulation. To establish causality, I exploit exogenous variation in the location of great estates coming from geographical differences in soil texture and from the redistribution of land after the Norman conquest of 1066. In doing so, I document a strong persistence in inequality over eight centuries. Next, I show that the estimated effects are stronger where landlords had political power and that, where landownership was concentrated, individuals’ demand for education also responded to state-education funding. This implies that land inequality distorted human capital because of the political opposition of landed elites to education provision and not because of economic inequality or the lack of private demand for education.
Persuasion on Networks
Konstantin Sonin, Professor at the University of Chicago
Abstract: We analyze persuasion in a model, in which each receiver (of many) might buy a direct access to the sender's signal or to rely on her network connections to get the same information. For the sender, a more biased signal increases the impact per subscriber (direct receiver), yet diminishes the willingness of agents to become subscribers. Contrary to the naive intuition, the optimal propaganda might target peripheral, rather than centrally located agents, and is at its maximum level when the probability that information flows between agents is either zero, or nearly one, but not in-between. The density of the network has a non-monotonic effect on the optimal level of propaganda as well.
The Logic of Fear: Populism and Media Coverage of Immigrant Crimes
Stephanos Vlachos, Assistant Professor in the Department of Economics at the University of Vienna
Abstract: We study how news coverage of immigrant criminality impacted municipality-level votes in the November 2009 “minaret ban” referendum in Switzerland. The campaign, successfully led by the populist Swiss People’s Party, played aggressively on fears of Muslim immigration and linked Islam with terrorism and violence. We combine an exhaustive violent crime detection dataset with detailed information on crime coverage from 12 newspapers. The data allow us to quantify the extent of pre-vote media bias in the coverage of migrant criminality. We then estimate a theory-based voting equation in the cross-section of municipalities. Exploiting random variations in crime occurrences, we ﬁnd a ﬁrst-order, positive effect of news coverage on political support for the minaret ban. Counterfactual simulations show that, under a law forbidding newspapers to disclose a perpetrator’s nationality, the vote in favor of the ban would have decreased by 5 percentage points (from 57.6% to 52.6%).
A treaty for the rich and politically loyal? The political economy of center-regional treaties in Yeltsin’s Russia
Ekaterina Paustyan, PhD Candidate at Central European University (Hungary)
Abstract: The paper studies the factors accounting for the signing of a bilateral treaty with Moscow between 1994 and 1998. Combining actor-centered and institutional accounts, it examines an interplay of such factors as demanding sovereignty, having an elected executive, voting for Yeltsin in the 1996 presidential election, and having a donor status. Fuzzy-set Qualitative Comparative Analysis (fsQCA) reveals two combinations of factors sufficient for signing a treaty. They are voting for Yeltsin in the 1996 presidential election and being a donor region or not having an elected executive and voting for Yeltsin in the 1996 presidential election. These results suggest that at the late stage of the treaty signing process Yeltsin’s strategy of ‘executive bilateralism’ led to the formation of a broad coalition with both democratic and authoritarian subnational leaders. In the short run, this strategy allowed Yeltsin to win the 1996 presidential elections, yet in the long term, it had contributed to the emergence of authoritarian federalism in Russia in the 2000s.
Are some dictators more attractive to foreign investors?
Laurent Weill, https://www.em-strasbourg.eu/laurent-weill--66459.kjsp
Abstract: Since political uncertainty is greater in dictatorship than in democracy, we test the hypothesis that foreign investors scrutinize public information on dictator to assess this risk. In particular, we assume they use five suitable dictators’ characteristics: age, political experience, education level, education in economics, and prior experience in business. We perform fixed effects estimations to explain FDI inflows on an unbalanced panel of 100 dictatorial countries from 1973 to 2008. We find that educated dictators are more attractive to foreign investors. We obtain strong evidence that greater educational attainment of the leader favors FDI. We also find evidence that education in economics of the leader enhances FDI. By contrast, age, political experience, and prior experience in business have no relationship with FDI. Our results are robust to several tests and checks, including the comparison with democracies.
Preemptive versus Counter Offers
Kemal Kivanc Akoz, Assistant Professor in the Department of Theoretical Economics HSE
Abstract: We consider an ultimatum-game setup, which has two key non-standard features: (1) The responder has an initial fallback position, which is her private information (except for the complete-information case), and (2) she can improve her initial fallback position further by means of a costly investment, which does not improve the joint surplus and thus is a deadweight loss. There are two sources of inefficiency: disagreement possibility and the deadweight-loss investment. The proposer ends up either making a counter offer to the responder after finding out the responder's type as well as her best outside offer or makes a particular preemptive offer before her investment and thus before the uncertainty about her type is not resolved (except for the incomplete-information case). Thus, any preemptive offer aims for agreement before investment, which, if accepted, avoids the deadweight-loss investment, and thus inefficiency; if rejected, it always leads to inefficiency as players receive their fallback payoffs. A counter offer, on the other hand, always guarantees agreement, but only after investment cost is incurred, and thus it is inefficient. We consider the complete-information as well as the no- and noisy-information cases. We find that in the complete-information case the unique equilibrium offer is a preemptive offer which always achieves efficiency and leads to agreement. In the other cases, if the proposer's (prior or posterior) belief about the responder's type is not precise enough, he might prefer to wait to make a counter offer until after the responder makes her investment and receives outside offers. It turns out that more precise information reduces both types of inefficiency by leading to preemptive offers which are accepted with higher probability. We also show that our results are robust to various extensions such as risk aversion by players, multiple offers by the proposer, continuum of responder types and type-dependent investment costs.
Leonid Polishchuk, Professor in the Department of Applied Economics HSE
Post-Communist Transition as a Critical Juncture: Political Origins of Institutional and Cultural Bifurcation
Abstract: Quarter of a century after market reforms, transition countries exhibit vastly different economic and political institutions. We trace these differences to the political environments at the time of reforms, when restriction of checks and balances was considered instrumental to expediting unpopular transformations and protecting the reforms from populist backlash. However, the representation vacuum at the critical juncture of post-communist transition was filled by narrow interests, which established extractive institutions serving the elites, instead of inclusive institutions, which are in broad societal interests. Choices made at critical junctures were pivotal for subsequent institutional trajectories, and extractive and inclusive regimes sustained themselves over long periods. We use the number of “veto players” in the early 1990s as a measure of political ‘plurality’ of post-communist transition, and show that it is a consistently strong predictor of institutional quality over the ensuing quarter of a century. We also demonstrate that the same transition plurality measure explains cross-country differences in economic inequality across the post-communist region, and uneven social support of market and democracy, indicating ongoing “institutional learning”.
To Russia with Love? The Impact of Sanctions on Elections
Michele Valsecchi, Assistant Professor of Economics at the New Economic School
Abstract: Do economic sanctions weaken the support for incumbent governments? To answer this question, we focus on the sanctions imposed on Russia after 2014 and estimate their effect on voting behavior in both presidential and parliamentary elections. For identification, we use cross-regional variation in (pre-determined) trade exposure to sanctioning and non-sanctioning countries and before-after voting data at both regional and district level. The sanctions caused an increase in support for the incumbent. Around 39 percent of the increase in the vote shares of the incumbent president and party can be explained by sanctions. This result is robust to alternative measures of sanction exposure, including a measure of trade loss, i.e., the difference between observed trade flows and counter-factual trade flows computed via a full-general-equilibrium gravity model. Absence of pre-trends, as well as several placebo estimations, support the validity of the identification assumption. We then explore several potential mechanisms, including propaganda, electoral fraud as well as standard demand-supply effects. Overall, while it is hard to evaluate all the potential motives that sanctioning countries might have had, our results suggest that economic sanctions are not an effective tool for reaching one of their primary goals and can actually backfire.
Do we know how relatively rich are we? Actual and perceived place in the income distribution
Eugenia Chernina, Junior Research Fellow at the Centre for Labour Market Studies
Abstract: The issue of inequality is hotly debated among academics as well as in society as a whole. One of the reasons for this attention is in the tentative influence that inequality can have on various dimensions of economic, political and social life. This hypothesis assumes implicitly that individuals have more or less correct understanding of actual variation in wealth and income in their countries and know their relative place in the distribution. However, a number of studies (e.g. Gimpelson and Treisman, 2018) show that population may misperceive the true level of inequality, and it is the perception of inequality, and not its true values, that affects behavior. Thus, the question arises how far individuals’ perceptions deviate from the true level of inequality and what factors shape the divergence. This study tries to answer these questions using the 2016 wave of the Russian Longitudinal Monitoring Survey of the Higher School of Economics. To analyze the discrepancy between subjective and objective inequality, we look at the gap between the subjective and objective positions of respondents in the welfare distribution. Further, using a wide range of individual, family and regional characteristics, we explore the discrepancy.
Market and Network Corruption
Aleksey Oshchepkov, Senior Research Fellow at the Centre for Labour Market Studies
Abstract: Economists tend to reduce all corruption to impersonal market-like transactions, ignoring the role of social ties in shaping corruption. In this paper, we show that this simplification substantially limits the understanding of corruption. We distinguish between market corruption (impersonal bribery), and network (or parochial) corruption which is conditional on the social connections between bureaucrats and private agents. We argue, both theoretically and empirically, that these types of corruption have different qualities. Using data from the Life in Transition Survey (LiTS) which covers all post-socialist countries we show, first, that the correlation between market and network corruption is weak, which implies that ignoring network corruption leads not only to an underestimation of the overall scale of corruption but also biases national corruption rankings. Secondly, in line with theoretical expectations, we find that network corruption is more persistent over time, less related to contemporary national socio-economic and institutional characteristics and has stronger historical roots than market corruption. Yet, network corruption, unlike bribery, is not able to ‘grease the wheels’ and is not associated with political instability. Lastly, we show that the decline in bribery which was observed in almost all post-socialist countries in the period from 2010 to 2016 was accompanied by rising network corruption in many of them, which has important policy implications.
Migration of Russian settlers and the legacy of interregional development in Kazakhstan
Dmitry Veselov, Associate Professor and senior research fellow at the Faculty of Economic Sciences (HSE)
Abstract: The paper explores the effect of migration of Russian settlers on the intra-regional development in Kazakhstan. We use the 1897 census dataset of the Russian Empire and modern economic data to provide links between the density of the Russian population in Kazakhstan and the current level of economic development. Exploiting exogenous geographic and geopolitical sources of variation across twenty-six districts (uyezd) we provide the empirical evidence of positive impact of the migration of Russians in XVIII-XIX centuries on the current level of development. The paper discusses several channels of such influence: human capital formation channel and the Soviet Union industrialization policy.
Generalized Trust, Preferences for Redistribution and Institutions
Koen Schoors, professor at the Ghent University
Abstract: We study how institutional quality moderates the relationship between generalized trust and preferences for redistribution. It has been well established in the literature that generalized trust is conducive to greater support for redistribution because it reduces expectations of cheating and free-riding among others. Following Algan et al. (2016), we hypothesize that the effect of trust on preferences for redistribution is conditional on the quality of the institutional environment. Trusting individuals, that is, are hypothesized to be more supportive of redistribution in favor of target groups with a high propensity of free-riding (like the poor and the unemployed) if the institutional environment is more likely to detect and penalize free-riders. We test this hypothesis with data from the Life in Transition II survey that contains 38,000 thousand respondents from 35 transition and developed countries. We find that the effect of individual trust on supporting redistribution in favor of the poor and the unemployed depends indeed on the quality of the formal institutions in the environment, like the country-level control of corruption, the rule of law and government effectiveness. Trust and formal institutions are therefore complements with respect to their effect on preferences for redistribution. This relationship is not observed for groups conventionally thought of as unambiguously deserving or delineated with free-riding proof eligibility criteria, i.e. for the old, the disabled, and families with children. Additionally we find that trust under good institutions is associated indicating all beneficiary groups as deserving support.
Decentralization of Firms in a Country with Weak Institutions: Evidence from Russia
Irina Levina, IIMS Research Fellow at the NRU HSE
Abstract: In this paper, we study evidence from Russian firms to explore whether decentralization of firms can be successful under weak institutions. We introduce the concepts of real decentralization for the delegation of decision-making authority in firms to professional people hired though open competition, and of cautious decentralization – for the delegation to people hired through connections. We argue that real decentralization has a potential to significantly improve the efficiency of firms; benefits that real decentralization can yield to firms’ efficiency can be so important that they can outweigh agency costs of decentralization even under weak institutions. However, the higher the role of corruption for economic wellbeing of firms under weak institutions, the lower the firms’ returns on being economically efficient, and therefore, the lower the returns on real decentralization. Our empirical results demonstrate that really decentralized Russian firms are, on average, significantly more likely to implement investment. The gap in probability of investment between really decentralized and other Russian firms is very substantial under the low or medium values of corruption; however, the gap declines as corruption grows and becomes statistically insignificant under the very high values of corruption.
Enemies of the people
Gerhard Toews, Professor at the New Economic School (NES)
Abstract: Enemies of the people were the millions of intellectuals, artists, businessmen, politicians, professors, landowners, scientists, and affluent peasants that were thought a threat to the Soviet regime and were sent to the Gulag, i.e. the system of forced labor camps throughout the Soviet Union. In this paper we look at the long-run consequences of this dark re-location episode. We show that areas around camps with a larger share of enemies among prisoners are more prosperous today, as captured by night lights per capita, firm productivity, wages, and education. Our results point in the direction of a long-run persistence of skills and a resulting positive effect on local economic outcomes via human capital channels.
Demographic Consequences of the 1933 Soviet Famine
Natalia Naumenko, Brown University postdoctoral research associate at the Political Theory Project at Brown University
Abstract: Using recently discovered archival data, this article studies the impact of the 1933 Soviet famine on population and urbanization patterns. It documents that, although most of the direct victims lived in rural areas, the famine had a persistent negative impact on the urban population. In fact, the rural population gradually recovered while urban settlements in more affected areas became permanently smaller. The paper argues that the shortage of labor during the crucial years of rapid industrialization hindered the development of cities in areas struck by the famine. Thus, the timing of the shock to population appears to be an important factor. While established urban networks tend to recover from large temporary negative shocks, the lack of people during construction and rapid growth might have a permanent negative impact.
Moneyball game" and players' incentives in football
Inna Zaitseva, Research Fellow at the Laboratory of Sports Studies
Abstract: The idea of “Moneyball” phenomenon originates from a number of cases in baseball when labour market undervalued specific player skills. Later on, in football was found an evidence of undervaluation of players’ effort, measured as the distance covered during a match. This fact raises a question on players incentives to exert different levels of effort in different games. The hypothesis of this research suggests that players can express their loyalty to the values of their club by increasing the level of effort in matches, which are considered as principal for the club. One of the explicit criteria for principal matches in football is a derby status of a game. This research demonstrates, that players in Bundesliga in season 2017-2018 exerted a greater level of effort in home derby games, which supports the idea of players’ loyalty to club’s values.
Cemal Eren Arbatli, Assistant Professor and Research Fellow in the Department of Theoretical Economics at the NRU HSE
Partisanship as Tradition: Critical Junctures, Collective Memory and Persistent PartyIdentification
Abstract: Party loyalty can be motivated by various forces. Sometimes it is driven by instrumental motives and ideological leanings. At other times, it is better viewed as an expression of more enduring social and cultural identities transmitted across generations. We study the case of Sasun Armenians to illustrate this latter view. Our paper traces the origins of long-term party identi cation to a critical juncture in the local history of Sasun, a mountainous region of the Ottoman Empire located in Eastern Turkey. During the Great Massacres against Armenians at the end of the 19th century, Armenian residents of Sasun received armed support from the Armenian Revolutionary Federation (ARF) to defend their villages from military attacks. With the help of the ARF rebels, survivors of the Armenian Genocide (1915-1917) from Sasun region settled in various villages in modern-day Armenia. We show that the descendants of Sasun migrants strongly embrace the local legacy of their ancestral contact with the ARF. They are not only more likely to name their children after the ARF rebels who helped Sasun people in their armed struggle but they also are more likely to vote for the ARF today, although the party was not active in Armenia during the seven decades of the Soviet rule.
Heike Henning-Schmidt, Chief Research Fellow at the International Laboratory for Experimental and Behavioural Economics and Guest Researcher at the University of Bonn
Dishonesty in healthcare practice: A behavioral experiment on upcoding in neonatology
Abstract: Dishonest behavior significantly increases the cost of medical care provision. Upcoding of patients is a common form of fraud to attract higher reimbursements. Imposing audit mechanisms including fines to curtail upcoding is widely discussed among healthcare policy-makers. How audits and fines affect individual health care providers' behavior is empirically not well understood. To provide new evidence on fraudulent behavior in health care, we analyze the effect of a random audit including fines on individuals' honesty by means of a novel controlled behavioral experiment framed in a neonatal care context. Prevalent dishonest behavior declines significantly when audits and fines are introduced. The effect is driven by a reduction in upcoding when being detectable. Yet, upcoding increases when not being detectable as fraudulent. We find evidence that individual characteristics (gender, medical background, integrity) are related to dishonest behavior. Policy implications are discussed.
Anand Sokhey, Associate Professor at the University Colorado at Boulder
Beyond Thoughts and Prayers: The Christian Nationalism of the Gun Control Debate
Abstract: The U.S. has the 31st highest rate of non-conflict gun violence in the world, far outpacing its socio-economic peers. And, over the past decade, public debate over gun control in the United States has grown immensely. However, despite public outcry, there has been almost no traction on gun control. We investigate a previously understudied mechanism to address this puzzle: religion. Do Christian nationalist values impede many religious Americans from supporting gun control? In this paper we present multifaceted approach to the relationship between religion and gun control, drawing upon the integration of Christian nationalist views, partisanship, and clergy messaging. Our data comes from a May 2018 national sample of the United States, and we make comparisons to a 2007 national sample to assess consistency and change.
Jan Fidrmuc, Senior Lecturer in the Department of Economics and Finance and CEDI at the Brunel University
"Beautiful Minds: Physical Attractiveness and Research Productivity in Economics"
Abstract: We study the impact of physical attractiveness of on productivity. Previous literature found a strong impact on wages and career progression, which can be either due to discrimination in favor of good-looking people or can reflect an association between attractiveness and productivity. We utilize a context where there is no or limited face-to-face interaction, academic publishing, so that scope for beauty-based discrimination should be limited. Using data on around 2,000 authors of journal publications in economics, we find a significantly positive effect of authors’ attractiveness on both journal quality and citations. However, the impact on citations disappears after we control for journal quality.
Chris Berry, Professor at the University of Chicago
"Leadership or Luck? Randomization Inference for Leader Effects"
Abstract: Anecdotal evidence suggests that some political leaders are more effective than others, causing better outcomes for their citizens. However, observed differences in outcomes between leaders could be attributable to chance variation. To solve this inferential problem, we develop RIFLE, a quantitative test of leader effects. RIFLE allows researchers to test a null hypothesis of no leader effect and also estimate the proportion of variation in an outcome variable attributable to leaders vs. other factors, and it provides more statistical power and more reliable inferences than other strategies. To demonstrate the substantive value of RIFLE, we implement it for world leaders, U.S. governors, and U.S. mayors and for several outcomes. RIFLE can be applied to virtually any setting with leaders and an objective outcome of interest, so its continued application should improve our understanding of where, when, and why leaders matter.
Chris Miller, Assistant Professor in the Fletcher School at the Tufts University, USA
"The Politics of Inflation and the Distribution of Income in Early 1990s Russia"
Abstract: This paper will reexamine the failure to stabilize prices, making use of newly collected sources from the State Archive of the Russian Federation as well as Yegor Gaidar’s personal archive. First, the paper will examine the Gaidar team’s views of inflation in 1991 and their expectations and preferences for 1992 and 1993. Then, the paper will reconstruct debates about inflation and monetary policy during the crucial years of 1992 and 1993, illustrating the extent to which Russia’s legislature, the Verkhovny Sovet, demanded policies that made price stabilization impossible. Finally, the paper will explore the distributional effects of the inflation, concluding by noting that the inflation’s reduction of household well-being is consistent with the thesis that firms and their representatives in the Verkhovny Sovet pushed the policies that made inflation inevitable.
Andy Eggers, Assistant Professor in the Department of Politics and International Relations at the University of Oxford, UK
"Who votes more strategically?"
Abstract: Strategic voting is an important explanation for aggregate political phenomena, but we know little about how strategic voting varies across types of voters. Are richer voters more strategic than poorer voters? Does strategic behavior vary with age, education, gender or political leaning? The answers may be important for assessing how well an electoral system represents different preferences in society. We introduce a new approach to measuring and comparing strategic voting across voters that can be broadly applied given appropriate survey data. In recent British elections, we find no difference in strategic voting by education level, but we do find that older voters are more strategic than younger voters, richer voters are more strategic than poorer voters, and left-leaning voters are more strategic than right-leaning voters. In the case of age and income, the difference in strategic voting exacerbates known inequalities in political participation.
David Schindler, Assistant Professor at the Tilburg University
"Shocking Racial Attitudes: Black GIs in Europe"
Melanie Meng Xue, Postdoctoral Fellow at Northwestern University (USA)
"Autocratic Rule and Social Capital: Evidence from Imperial China"
Andrei Markevich, Professor, New Economic School
"Democratic Support for the Bolshevik Revolution: An Empirical Investigation of 1917 Constituent Assembly Elections"
Kseniya Abanokova, Junior Research Fellow at the Centre for Comprehensive Social Policy Studies (HSE)
"Pocketbook motivation in voting in Russia"
Israel Marques II, Assistant Professor at the HSE School of Political Science and ICSID Research Fellow
"Institutional Quality and Social Policy Preferences: Experimental Evidence" (co-authored by Joseph B. Schaffer and Sarah Wilson Sokhey)
Ted Gerber, Professor of Sociology at the University of Wisconsin-Madison (USA)
"Homeownership, regime support, and civic engagement in four post-Soviet societies"
Gunes Gokmen, Assistant Professor at the New Economic School (Russia)
"War and Well-Being in Transition: Russo-Georgian Conflict as a Natural Experiment"
Vladimir Kozlov, Associate Professor at the Institute of Demography, HSE (Russia)
"Testosterone and Repression in Non-Democracies: Evidence from a Sample of Russian Governors"
Luigi Pascali, Associate Professor at the Pompeu Fabra University (Barсelona, Spain)
"Cereals, Appropriability and Hierarchy"
Stephen G. Wheatcroft , Professor at the School of Historical and Philosophical Studies, University of Melbourne (Australia)
"The importance of the grain problem in the Russian Revolution and for the next 40 years of Soviet Economic"
Anne Meng, Assistant Professor in the Department of Politics, University of Virginia (USA)
"Autocratic Constitutions and Leadership Succession in Dictatorial Regimes"
Julian G. Waller, Ph.D Candidate at the Department of Political Science at the George Washington University and ICSID Visiting Researcher
"Popular Perceptions and the De Facto Role of Political Parties in the Euromaidan Protests of 2013-2014"
Lauren McCarthy, University of Massachusetts Amherst, ICSID HSE
"Managed Civil Society and the Realities of Police Oversight in Russia"
Philippe Gagnepain (Paris School of Economics and Université Paris 1)
"Full versus binary menus: What are the welfare gains?" (co-authored by David Martimort)
Denis Ivanov (ICSID, HSE)
"Do institutions cause social trust? Evidence from an institutional reform"
Ekaterina Borisova (ICSID, HSE)
"Elections, Protest and Trust in Government: A Natural Experiment from Russia"
Constantine Sorokin (International Laboratory of Decision Choice and Analysis, HSE)
“Distributional comparative statics for auctions and beyond”
Noah Buckley (ICSID, HSE)
“Calculating Corruption: Political Competition and Bribery under Authoritarianism”
Michael Rochlitz (Department of Political Science, HSE)
“Does Independent Media Matter in a Non-Democratic Election? Experimental Evidence from Russia”
Elena Podkolzina (Center for Institutional Studies, HSE)
“Corruption perception and competition in public procurement: empirical evidence from Russian regions”
Tatyana Mikhailova (RANEPA)
“Agglomeration effects in Russian manufacturing”
Israel Marques (Department of Political Science and ICSID, HSE)
“Institutional Quality and Social Policy Preferences”
Natalya Naumenko (Northwestern University)
“Collectivization of Soviet agriculture and 1932-1933 famine”
Niall Hughes (Warwick University)
“How Transparency Kills Information Aggregation: Theory and Experiment”
Andrey Shcherbak (Laboratory for Comparative Social Research, HSE)
“The recipe for democracy? Improvement in diet as a structural prerequisite for political change”
Thomas Leeper (London School of Economics)
“If Only Citizens Had a Cue: The Process of Opinion Formation over Time”
Denis Ivanov (ICSID, HSE)
“Bridging or Bonding? Preferences for Redistribution and Social Capital in Russia”
Andrew Little (Cornell University)
“I Don't Know”
Andrea Matranga (NES)
“All Along the Watchtower: Linear Defenses and the Introduction of Serfdom in Russia”
Andrei Markevich (NES)
“The Value of Statistical Life in a Dictatorship”
Kyle Marquardt (University of Gothenburg)
“Identity, ethnicity and conflict: Social and political exclusion and civil war onset”
Gunes Gokmen (NES)
“The Power of Religion: Organized Religion and Power Inequality across World Societies”
Vasily Rusanov (Center for Institutional Studies, HSE)
“Minorities and business: the case Russian of Old Believers”
Sergei Izmalkov (NES)
“Spatial competition with intermediaries”
Alexey Zakharov (Department of Theoretical Economics, HSE)
“Eqilibrium taxation under income uncertainty”
Douglas Campbell (NES)
“Trade Shocks, Taxes, and Inequality”
Leonid Polishchuk (Faculty of Economic Sciences, HSE)
“Institutions and Visa Regimes”
Dagmara Celik Katreniak (CERGE-EI)
“Dark Side of Incentives: Evidence from a Randomized Control Trial in Uganda”
Barbara Lehmbruch (Uppsala University)
“Between the Public and the Private: Quasi-Autonomous Agencies, Institutional Legacies and Post-Soviet Governments”
Anton Kazun (ICSID, HSE)
“Community of Attorneys and the Quality of Law Enforcement in Russian Regions”
Tatiana Mikhailova (RANEPA)
”Geography of import transportation routes in Russia: the choice of an entry point”
Alexander Yarkin (HSE)
”Property rights and inequality in non-democratic regimes: theory and evidence“
Gunes Gokmen (NES)
”Minorities and Long-run Development: Persistence of Armenian and Greek Influence in Turkey”
Israel Marques (ICSID, HSE)
”Institutional Quality and Individual Preferences for Social Policy”
Steven N. Durlauf (University of Wisconsin-Madison)
“Capital In the Twenty-First Century: A Review of Thomas Piketty's book”
Paul Castañeda Dower (NES)
“The Stolypin Reform and Agricultural Productivity in Late Imperial Russia”
Franziska Keller (New York University)
“Shaking hands in public. What elite co-appearances tell us about the politics behind the scenes“
Andrei Yakovlev (ICSID, HSE)
“Measurement of business climate in Russia: who did perceive the changes and how these changes are related to Mr. Putin?”
Evgeny Yakovlev (HSE)
“How persistent are consumption habits: Micro-evidence from Russia”
Tim Jaekel (HSE School of Public Administration)
“Risk Taking in the Local Public Sector: Explaining Participation Decision in a sector-led improvement exercise of Swedish municipalities”
Ruben Enikolopov (NES)
“Winning Hearts and Minds: Evidence from a Field Experiment in Afghanistan”
Michael Rochlitz (Department of Political Science, HSE)
“Performance Incentives and Economic Growth: Regional Officials in Russia and China”
Alexei Khazanov (NES)
“On the Breakup of Nations: the Case of a Large Federal State”
Andrei Govorun (IIMS, HSE)
“The Political Roots of Intermediated Lobbying: Evidence from Russian Firms and Business Associations”
Andrea Matranga (Universitat Pompeu Fabra)
“Climate-Driven Technical Change: Seasonality and the Invention of Agriculture”
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