Russia's 1999–2000 Election Cycle and the Politics-Banking Interface

38 Pages Posted: 5 Nov 2017 Last revised: 18 Nov 2021

See all articles by Koen J. L. Schoors

Koen J. L. Schoors

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of General Economics

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie)

Date Written: November 1, 2017

Abstract

We investigate whether lending by the dominant Russian state bank, Sberbank, contributed to Vladimir Putin’s ascent to power during the presidential elections of March 2000. Our hypothesis is that Sberbank corporate loans could have been used as incentives for managers at private firms to mobilize employees to vote for the incumbent regime. In line with our proposed voter mobilization mechanism, we find that the regional growth of Sberbank corporate loans in the months before the presidential election is related to the regional increase in votes for Putin and to the regional increase in voter turnout between the Duma election of December 1999 and the presidential election of March 2000. The effect of Sberbank firm lending on Putin votes was most pronounced in regions where the governor was affiliated with the regime and in regions with extensive private employment. The effect was less apparent in regions with many single-company towns, where voter intimidation is sufficient to get the required result. Additional robustness checks and placebo regressions confirm the main findings. Our results support the view that additional Sberbank corporate loans granted prior to the March 2000 presidential election facilitated Putin’s early electoral success.

Keywords: bank, credit policy, politics, Russia

JEL Classification: G21, P34

Suggested Citation

Schoors, Koen J. L. and Weill, Laurent, Russia's 1999–2000 Election Cycle and the Politics-Banking Interface (November 1, 2017). BOFIT Discussion Paper No. 17/2017, Available at SSRN: https://ssrn.com/abstract=3065178 or http://dx.doi.org/10.2139/ssrn.3065178

Koen J. L. Schoors (Contact Author)

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 265 35 99 (Fax)

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 264 35 99 (Fax)

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie) ( email )

61 Avenue de la Forêt Noire
F-67085 Strasbourg Cedex
France

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