Individuals and Organizations as Sources of State Effectiveness

Michael Best, Jonas Hjort and David Szakonyi

American Economic Review, 2023, vol. 113, issue 8, 2121-67

Abstract: Bureaucrats implement policy. How important are they for a state's productivity? And do the trade-offs between policies depend on their effectiveness? Using data on 16 million public purchases in Russia, we show that 39 percent of the variation in prices paid for narrowly defined items is due to the individual bureaucrats and organizations who manage procurement. Low-price buyers also display higher spending quality. Theory suggests that such differences in effectiveness can be pivotal for policy design. To illustrate, we show that a common one—bid preferences for domestic suppliers—substantially improves procurement performance, but only when implemented by ineffective bureaucrats.

JEL-codes: D73 H57 H83 L14 P26 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Individuals and Organizations as Sources of State Effectiveness (2017)
Working Paper: Individuals and Organizations as Sources of State Effectiveness (2017)
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DOI: 10.1257/aer.20191598

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