Binding Ties, Binding Commitments: Evidence from Public-Private Partnerships in Vocational Education
Work on the political economy of investment emphasizes the importance of credible commitments between the firms and the state for developmental outcomes. How can credible commitment be generated in environments characterized by pervasive state-led violence, expropriation, and weak constraints on officials? This project explores this question through the lens of public-private partnerships in vocational education in Russia’s regions. Research on Europe and the OECD cases emphasizes a strong civil society, such as strong workers’ and employers’ associations, along with free-markets overseen by a well-constrained state, as crucial to fostering credible commitments between firms and the state that allow for cooperative co-investment in vocational education. Yet in many Russian regions, cooperative efforts in vocational education have emerged despite weak employer associations and unions; poorly functioning market institutions; and weak institutions that enable pervasive state corruption and violent predation. In this paper, I argue that in the absence of strong formal institutions, personal ties between state officials and businesses allow firms to acquire information about potential partners within the state bureaucracy and punish low-level officials for breaching agreements and engaging in rent-seeking. This mechanism creates commitment mechanisms between well-connected firms and the state that allow for co-investment. The state in turn uses its powers of contract enforcement to insure that firms do not free-ride on cooperative institutions, creating credibility between firms. To test this theory I take advantage of an original dataset of all public-private partnership contracts between Russian firms and public vocational education institutions from 2013 to 2019. Drawing on a separate dataset of all Russian firms, I match firms that participate in public-private partnerships to non-participants to create a sample for analysis. I use a unique database of biographical information on regional executives, legislators, and firm officers in the sample to trace their shared work histories, birthplaces, and education and establish connections. This work has important implications for the literature on vocational education and public-private partnerships, as well as for research on business-state relations and investment in violent, weakly institutionalized settings.
Building Social Policy: Behavior, Institutions, and Redistribution
with Sarah Wilson Sokhey (University of Colorado-Boulder)
How does the quality of institutions shape both supply and demand for redistributive social policy across the world? Existing accounts of demand for social policy tends to largely assume good faith on the part of state actors: benefits promised by the state de jure today will be paid out de facto tomorrow baring uncontrollable shocks. This project challenges this central assumption by arguing that the quality of institutions – human constraints on human interaction – have important consequences for the ability of politicians to keep their promises. Weak institutions lead to many problems, including low accountability, weak rule of law, and corruption. These problems shape demand for social policy by enabling select groups to benefit at the expense of others, while creating new vulnerabilities for everyone else. This project develops a generalized framework for understanding the link between institutional failures and support for state-run redistributive programs. By showing the concrete costs (or benefits) of these institutional failures for different groups, we generate a broad set of predictions about support for social policy where institutional quality is poor. We then link these to a broader theory of supply and demand for social policy that helps explain how institutions shape welfare state outcomes. We argue that poor quality institutions alter demand for social policy by destroying the credibility of complex, sustainable, long-term social policies. This in turn creates incentives for politicians to supply social policies focused on short-term payouts and simple eligibility criteria. We test the observable implications of our theory using a combination of laboratory and survey experiments, coupled with cross-national statistical analysis and case studies.
Substantively, this project is important, because social policy is a crucial instrument for reducing poverty and encouraging skill investment. However, in practice it often becomes a crass tool for buying political support and regime maintenance. Knowing who supports particular social policies and why is crucial to understanding which purpose it serves. As such, understanding the micro-foundations of social policy support are crucial for understanding how policies are designed and their implications for the popular underpinnings of political support, poverty, inequality, and development.