Firms and Social Policy in the Post-Communist Bloc: Evidence from Russia

45 Pages Posted: 27 Dec 2014

See all articles by Israel Marques

Israel Marques

National Research University Higher School of Economics

Date Written: December 25, 2014

Abstract

When does business support the expansion of social policy in the developing world? Existing work on managers preferences has tended to concentrate on the developed world, where governments can credibly commit to policy, tax evasion is constrained, and mechanisms exist to hold the bureaucracy accountable for policy implementation. In this paper, I relax these assumptions, arguing that weak institutions create opportunities for some firms to shift costs onto others: making social policy more attractive. I argue that firms with political connections are uniquely positioned to benefit from subsidies and property rights protection, which decreases the cost of social policy, while firms with low visibility can evade taxes and free-ride off universalistic social policy. I test this argument using a survey of 666 firms in 10 Russian regions.

Keywords: Labor markets, Firm manager preferences, Tax evasion, Politically connected firms, Welfare state

JEL Classification: L21, L33, O15, 017, H53

Suggested Citation

Marques, Israel, Firms and Social Policy in the Post-Communist Bloc: Evidence from Russia (December 25, 2014). Higher School of Economics Research Paper No. WP BRP 87/EC/2014. Available at SSRN: https://ssrn.com/abstract=2542755 or http://dx.doi.org/10.2139/ssrn.2542755

Israel Marques (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Register to save articles to
your library

Register

Paper statistics

Downloads
36
Abstract Views
398
PlumX Metrics