Encouraging Skill Development: Evidence from Public-Private Partnerships in Education in Russia’s Regions
with Thomas F. Remington (Harvard University and Emory University) and Vladimir Bazavliuk (NRU – HSE)
European Journal of Political Economy, Forthcoming
How and when are governments able to encourage firms and schools to work together to develop workers’ skills? Upgrading the quality of human capital in the workforce is widely seen as a key challenge faced by countries looking to escape the “middle income trap”. Growing attention has been paid to public-private partnerships (PPP) between individual firms and schools as a powerful tool for meeting this challenge, but key facilitators of PPP thought crucial in existing studies – strong, independent employers’ associations and labor unions – are often missing in such settings. To explore the emergence of PPP in skill development in the developing world, we draw on recent reform experiences in Russia’s regions that have led to a surge in complex, costly forms of PPP despite historically anemic business associations and unions. We argue that variation in the administrative capacity of regional governments and their political accountability explains this surge. Strong administrative capacity reassures all parties that regional authorities can monitor their counterparties’ compliance with agreements, while political accountability creates incentives for authorities to do so. We test our argument using original data on the existence and content of firm-school partnerships across all Russia’s regions for 2013.
The Reform of Skill Formation in Russia: Regional Responses
with Thomas F. Remington (Emory University)
Europe-Asia Studies 72 (7): 1125-1152.
How do employers and governments in transitional economies cooperate to overcome institutional obstacles to skill formation? Existing literature in the VOC tradition distinguishes between coordinated market and liberal market economy approaches. So far, however, little research has addressed this problem in the context of emerging market economies, where the institutional preconditions for developed market economies may be lacking. This paper uses the case of Russia to address the ways in which emerging market economies can reform systems of vocational education and training. Following a discussion of the history of skill formation in Russia from the Soviet era through the present, we present four case studies of Russian regions that have successfully undertaken reform of VET.
Previous version: Higher School of Economics Research Paper No. WP BRP 19
Calling the Cavalry: Firm-level Investment in the Face of Decentralized Expropriation
with Anton Kazun (NRU-HSE), Irina Levina (NRU-HSE), and Andrei Yakovlev (NRU-HSE)
Journal of Institutional Economics 16 (4): 503 – 518
What characteristics of firms give them the confidence to invest in settings rife with expropriation by local officials? Empirically, firms often face the threat of expropriation from local agents of the state rather than a centralized autocrat. Because policing local officials is costly, it is difficult for the state to credibly commit to doing so with negative consequences for investment. We argue that one solution to decentralized expropriation is to allow firms to approach the state directly to ask for intervention. Not all firms are equally able to successfully get the attention of the state, however, so this mechanism only works for a subset of firms. We develop an argument about the firm-level characteristics – large-scale employment, political connections, foreign ownership, and business association membership – that should make the central state more attentive to calls for help. Because such firms are more likely to secure intervention against predatory bureaucrats, the latter are less likely to try to expropriate them. These firms’ investment decisions should be less sensitive to local expropriation than other firms. We test this argument using data on cases of decentralized expropriation across Russia’s regions and firm-level data from a cross-regional, large scale survey of Russian firms.
Partnerships for skill development in Russia
with Thomas F. Remington (Emory University)
Post-Communist Economies 32 (1), 1-23
What conditions enable governments, educational institutions, and enterprises to organise joint, comprehensive technical and vocational education systems (TVET) in developing and transitional countries? This paper explores this question on the basis of an original survey of enterprises in 12 Russian regions designed to determine the factors affecting local adoption of German-style ‘dual education’ in TVET. We distinguish between firm-level and regional-level factors influencing firms to form institutionally costly partnerships with vocational schools and government entities for the sake of upgrading skill formation. Our findings point to the importance of state intervention in fostering and enforcing firm-school partnerships in settings lacking the dense network of labor and business organizations characteristic of coordinated market economies in Western Europe.
Substituting Distribution for Growth: The Political Logic of Intergovernmental Transfers in the Russian Federation.
with Eugenia Nazrullaeva (UCLA) and Andrei Yakovlev (NRU-HSE)
Economics & Politics 28 (1), 23-54
Given limited resources and economic realities, how do politicians distribute monetary transfers in order to retain office? Previous work has largely focused on two models – a core model of rewarding loyal supporters and a swing model of purchasing the support of easily swayed voters. Empirical results have proven mixed, however. In this article, we argue that these mixed results are due to economic factors, which condition politicians’ distributive strategies. In our model, we consider that politician and voters are involved in a repeated game, where past expectations condition future strategy. Current (core) supporters who receive few benefits and perceive themselves worse off than other, less loyal, groups are likely to be less loyal themselves tomorrow. In our model, politicians avoid this by providing their supporters consumption benefits directly, in the form of transfers, or indirectly, via strong economic growth. Where economic growth is good, politicians can distribute less to core supporters, who benefit from the rising economy. Where economic growth is weak, however, politicians make transfers to their core supporters to ensure future loyalty. We test our theory using data on federal transfers from the Russian Federal government to 78 Russian Regions from 2000–2008.
The Political Roots of Intermediated Lobbying: Evidence from Russian Enterprises and Business Associations
with Andrei Govorun (NRU-HSE) and William Pyle (Middlebury)
Business and Politics 18 (4), 395-433
A business enterprise interested in influencing the design, adoption or enforcement of a particular law, rule or regulation often confronts a choice. Does it lobby officials directly? Or does it do so indirectly, using a collective action group as an intermediary? We draw on data from a large, 2010 survey of enterprises across the Russian Federation to demonstrate that the propensity to engage in intermediated lobbying increases with region-level political competition. Our explanation builds on recent evidence confirming Mancur Olson’s claim (1982) that less encompassing actors tend to lobby for more distortionary policies. We hypothesize that with greater political competition government officials become more responsive to encompassing voices (i.e., associations of businesses as opposed to single firms), since the electoral costs of being captured by narrower interests becomes greater. Evidence from a complementary survey of regional business association managers points in the same direction; the relative attention paid by officials to lobbying efforts by encompassing associations increases with political competition.
Previous Version: Higher School of Economics Research Paper No. WP BRP 46/EC/2013