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Firms And Social Policy In The Post-Communist Bloc: Evidence From Russia

Israel Marques

HSE Working papers from National Research University Higher School of Economics

Abstract: When does business support the expansion of social policy in the developing world? Existing work on managers preferences has tended to concentrate on the developed world, where governments can credibly commit to policy, tax evasion is constrained, and mechanisms exist to hold the bureaucracy accountable for policy implementation. In this paper, I relax these assumptions, arguing that weak institutions create opportunities for some firms to shift costs onto others: making social policy more attractive. I argue that firms with political connections are uniquely positioned to benefit from subsidies and property rights protection, which decreases the cost of social policy, while firms with low visibility can evade taxes and free-ride off universalistic social policy. I test this argument using a survey of 666 firms in 10 Russian regions.

Keywords: Labor markets; Firm manager preferences; Tax evasion; Politically connected firms; Welfare state (search for similar items in EconPapers)
JEL-codes: H53 L21 L33 O15 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2014
New Economics Papers: this item is included in nep-cis and nep-tra
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Published in WP BRP Series: Economics / EC, December 2014, pages 1-45

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:87/ec/2014

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