Using laboratory experiments conducted in two countries, we examine how poor institutions influence individuals support for redistribution. Contrary to conventional expectations, we argue that high-earning individuals will prefer more redistribution when they can more easily evade taxes. To test our expectations, we conducted a series of experiments from February to May 2016 simulating earned income and tax evasion. We find that high earners do indeed prefer more redistribution when they can more easily under-report their income. Our findings make an important contribution to the little studied question of how institutional quality affects social policy preferences.
On Wednesday, January 17 the all-Russian seminar "Mathematical methods of decision analysis in economics, finance and politics" was held. Professors Gorelov M.A. and Ereshko F.I. gave a lecture on «Blockchain techonology and control models in digital society»
Recently, it came to light that some national governments have been employing paid commentators (“trolls”) to interfere with online political conversations to express pro-government views and to challenge the narrative of political opposition. In this study, I explore the behavior and impact of 700 trolls allegedly employed in late 2014 and early 2015 to leave pro-government comments on the popular social media website LiveJournal.com. Using probabilistic topic modeling, I develop a method to estimate the causal effect of trolls intervention in online discussions under a set of assumptions. I find that trolls are more successful in diverting the discussions from politically charged topics than in promoting a pro-government agenda. I also find that trolls are successful in diverting discussions from purely political topics, but have no effect if users discuss problems of the national economy. Those who discuss poor economic growth, unemployment, and/or price inflation seem not to be responsive to troll interventions.
During the past two centuries, western nations have successively extended the voting franchise to citizens of lower income. We explain this process of democratization as a rational way for incumbent elites to wage war effectively on other nations, as in a strategic game of international conflict handing over military spending decisions to citizens who face a lower tax cost of arming may confer a strategic delegation advantage. We find supporting empirical evidence in case studies of franchise extensions in the United Kingdom, France, and the United States.
The mass privatization of housing was one of the most dramatic elements of the transformation of post-Soviet societies following the collapse of the USSR. However, the potential long-term consequences of the rapid creation of a large contingent of homeowners have not been fully appreciated or studied empirically. The growing scholarly literature that examines the political and social effects of homeownership is based almost entirely on market economies, in which homeownership is closely tied to family wealth, income, and other aspects of socioeconomic status. Due to its sudden and relatively arbitrary nature, housing privatization in the former USSR provides a unique research opportunity to assess the validity and mechanisms of the effects of homeownership on political attitudes and civic engagement that are proposed in this literature. The lecture presents results from the 2015 Comparative Housing Experiences and Stratification Survey (CHESS), implemented in Russia, Ukraine, Azerbaijan, and Kyrgyzstan. A range of analyses indicate that homeowners are more supportive of incumbent regimes, more civically engaged, and more politically active than non-homeowners in all four societies, with some variation by outcome.
This paper assesses the effect of the Russo-Georgian conflict of 2008 on the well-being of minorities in Russia. Using the Russian Longitudinal Monitoring Survey (RLMS), we first provide evidence that, on impact, the well-being of Georgian nationals suffered negatively from the conflict of 2008, both in comparison to their own well-being across time and to the well-being of the Russian majority. We also show that this negative effect of conflict does not have a long-term legacy that goes beyond 2008. Additionally, we demonstrate that the conflict has no direct effect on the livelihoods or the labor market outcomes of Georgian nationals. Therefore, we attribute the negative effect of conflict on well-being to more indirect channels such as fear, altruism, or sympathy. We also analyze the spillover effects of the Russo-Georgian conflict on other minorities that live in Russia. We find that while the well-being of migrant minorities who have recently moved to Russia is negatively affected, there is no effect on local minorities who have been living in Russia for at least ten years.
The paper examines the role of testosterone-driven aggressive behavior in politics of non-democratic regimes and, in particular, its influence on the extent of the repressiveness of these regimes. To measure testosterone exposure, we apply the facial width-to-height metric (fWHR) – a standard proxy widely used in the psychological literature - and look at a sample of Russian regional governors. We find a positive relationship between the fWHR metric and the level of repression in the region of the governor. Testosterone-related behavior is, however, more widespread among younger governors and among governors with shorter tenure in office. Thus, the paper contributes to the recent trend of integrating insights of behavioral economics into political economics research.
Local authorities can significantly affect economic performance of public organizations. Although outsourcing is popular in the private sector, there are few studies about its use in the public sector. Using the data on Moscow region we examine how political characteristics of local authorities influence school decisions to outsource food provision in 2016. We demonstrate that the probability of choosing outsourcing is significantly lower in municipalities with heads elected through direct elections and heads occupying their public position for the first term. Results are robust to inclusion of different economic characteristics of schools and municipalities.
Luigi Pascali (Pompeu Fabra University) presented a paper "Religion, Division of Labor, and Conflict: Anti-Semitism in German Regions over 600 Years"
The paper studies an organisational structure of contracting out public utilities to an asymmetric partnership between the local authorities and a vertically integrated firm. Being fiscally constrained and politically motivated the government delegates pricing decision in the downstream market to a partnership while the upstream market for essential input is not regulated directly. The accompanying regulatory instrument, namely the net budget transfer, is valued at the social cost of public funds and can be set ex post making the firm’s participation constraint non-binding. A negative budget transfer effectively extracts the firm’s rent in the non-regulated upstream market and depends on the corporate structure of the partnership. We build a formal model that predicts that local authorities with relatively high share in the partnership should decrease the net transfer when the profit margin in the downstream market falls. The empirical support for this finding is found in the panel data for 25 suburban passenger companies in Russia in 2011-2015. The effect of the share structure on the relationship between the compensation ratio and farebox ratio is captured by the interaction variable highlighting the nonlinear effect. The failure to fully compensate operational losses in the transportation market is interpreted as a system of pseudo-franchising contracts in the Russian suburban railway transport that, to some extent, reflects political preferences of the local authorities in the country.
