Career Concerns in a Political Hierarchy: A Case of Regional Leaders in Soviet Russia

Andrei Markevich and Ekaterina Zhuravskaya

No w0040, Working Papers from Center for Economic and Financial Research (CEFIR)

Abstract: We study the nature of career concerns of regional leaders in Soviet Russia under Khrushchev and Brezhnev. We document a substantial over-time variation in career concerns associated with reforms of Soviet governing hierarchy. We demonstrate that Khrushchev’s “Sovnarkhoz” system—a unique episode in Soviet history, when a traditional Soviet unitary-form (U-form) hierarchy was replaced by a multidivisional-form (M-form) organization—created yardstick competition in industrial performance of regional leaders. High-powered career incentives, however, did not result in faster industrial growth on average. We find that only two groups of regional leaders performed better in response to increased incentives. 1) Leaders appointed during “Sovnarkhoz” were able to learn new rules better. 2) Leaders with good connections to their neighbors were able to overcome negative inter-regional externalities, a common byproduct of M-form. The lack of success of the “Sovnarkhoz” system triggered the separation of regional units along production branch lines, which, as we show, led to a substantial decrease of industrial growth rates. The failure of Khrushchev's management reforms together with the U-form lobby contributed to his dismissal and reinstatement of the U-form hierarchy under Brezhnev.

Keywords: Career Concerns; Political Hierarchy; Yardstick Competition; Soviet Economy (search for similar items in EconPapers)
JEL-codes: D73 H7 J63 N44 P3 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2009-11
New Economics Papers: this item is included in nep-cdm, nep-cis, nep-his, nep-pol and nep-tra
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Related works:
Working Paper: Career Concerns in a Political Hierarchy: A Case of Regional Leaders in Soviet Russia (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cfr:cefirw:w0134

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