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Private Sector Policymaking

David Szakonyi

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: Candidates often tout their private sector experience when running for public office. But do businessperson politicians actually govern differently? This paper argues that given their preferences and managerial expertise, businesspeople in office will adopt policies favorable to the business community and improve government efficiency. To test these claims, I collect data on over 33,000 Russian mayors and legislators and investigate policy outcomes using detailed municipal budgets and over a million procurement contracts. Using a regression discontinuity design, I find that businessperson politicians increase expenditures on roads and transport, while leaving health and education spending untouched. Prioritizing economic over social infrastructure brings immediate benefits to firms, while holding back long-term accumulation of human capital. However, businesspeople do not reduce budget deficits, but rather adopt less competitive methods for selecting contractors, particularly in corruption-ripe construction. In all, businessperson politicians do more to make government run for business, rather than like a business.

Keywords: monocentric city model; price gradient; zoning; standard urban model (search for similar items in EconPapers)
JEL-codes: H11 H50 H72 P25 P26 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2018-08
New Economics Papers: this item is included in nep-cis and nep-tra
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Citations: View citations in EconPapers (1)

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