Autocratic governors in public procurement

The personal role of sub-national rulers is crucial for regional development in countries with weak institutions. This paper studies the impact of regional governors’ tenure in office and their local ties on procurement performance in Russia. To identify the causal effect, we construct instruments f...

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Bibliographic Details
Published in:European Journal of Political Economy 2020-01, Vol.61, p.101825, Article 101825
Main Authors: Tkachenko, Andrey, Esaulov, Daniil
Format: Article
Language:English
Subjects:
Autocracy
Competition
Contract execution
Efficiency
Elections
Government purchasing
Governor
Governors
Legislatures
Political economy
Public procurement
Purchasing
Regional development
Tenure
Tenure in office
Termination
Voting
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Summary:The personal role of sub-national rulers is crucial for regional development in countries with weak institutions. This paper studies the impact of regional governors’ tenure in office and their local ties on procurement performance in Russia. To identify the causal effect, we construct instruments for governor’s tenure by exploiting the regional vote share of ruling party in past parliament elections. We find the evidence that governors who do not have pre-governing local ties in the region (outsiders) demonstrate predatory behaviour, compared to governors with local ties (insiders). Namely, governors-outsiders restrict the competition at awarding stage significantly more than governors-insiders. Moreover, for governors-outsiders this restriction becomes stronger with tenure in office, while governors-insiders do not demonstrate such negative tenure effect. We argue that this restriction of competition by governors-outsiders cannot be explained by the intention of better contracts execution: the delays in execution and the probability of contract termination either increase or keep stable with tenure for governors-outsiders and these outcomes decrease with tenure for governors-insiders. •Paper estimates the effect of governors’ tenure in office on procurement outcomes.•Governors-outsiders restrict competition significantly more than governors-insiders.•Competition restriction by governors-outsiders becomes stronger with tenure in office.•This restriction cannot be explained by the intention of better contracts execution.•Governors-insiders have no negative tenure effect on competition and execution.
ISSN:0176-2680
1873-5703
DOI:10.1016/j.ejpoleco.2019.101825