EconPapers    
Economics at your fingertips  
 

Economic Transition and the Rise of Alternative Institutions: Political Connections in Putin's Russia

Natalia Lamberova and Konstantin Sonin ()

No 13177, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The economic transition from socialism in Russia has not resulted in the emergence of impersonal, rule-based institutions. Instead, the natural demand for institutions that protect property rights has led to the emergence of alternative, inefficient institutions such as that of cronyism - the practice of appointing personal acquaintances of the political leader to key positions. A political leader not constrained by institutions appoints cronies, as competent subordinates are more prone to switching allegiance to a potential challenger. As competence makes a bigger difference in a rule-based environment, such a leader has no interest in any institutional development. In a simple empirical exercise, using a data set that covers the richest Russians, we find a positive and significant effect of direct connections to the personal circle of President Putin on the wealth of businessmen. The magnitude of the effect varies at different levels of rents available for redistribution and "network centrality of a businessman": it is higher during the years of high oil prices, but is attenuated by the prominence of the businessman in the network.

Keywords: alternative institutions; network analysis; Political Connections (search for similar items in EconPapers)
JEL-codes: C45 P26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis and nep-tra
Date: 2018-09
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=13177 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Economic transition and the rise of alternative institutions: Political connections in Putin's Russia (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13177

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13177

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-07-22
Handle: RePEc:cpr:ceprdp:13177