Individuals and Organizations as Sources of State Effectiveness

88 Pages Posted: 1 May 2017

See all articles by Michael Best

Michael Best

Stanford University

Jonas Hjort

Columbia Business School - Finance and Economics

David Szakonyi

George Washington University; National Research University Higher School of Economics

Date Written: April 2017

Abstract

How important are bureaucrats for the productivity of the state? And to what extent do the tradeoffs between different policies depend on the implementing bureaucrats’ effectiveness? Using data on 16million public procurement purchases in Russia during 2011–2016, we show that over 40 percent of the variation in quality-adjusted prices paid—our measure of performance—is due to the individual bureaucrats and organizations that manage procurement processes. Such differences in effectiveness matter for policy design. To illustrate, we show that a common procurement policy— bid preferences for domestic suppliers—dramatically improves performance, but only when implemented by ineffective bureaucrats.

Suggested Citation

Best, Michael and Hjort, Jonas and Szakonyi, David, Individuals and Organizations as Sources of State Effectiveness (April 2017). NBER Working Paper No. w23350, Available at SSRN: https://ssrn.com/abstract=2961055

Michael Best (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Jonas Hjort

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

David Szakonyi

George Washington University ( email )

2121 I Street NW
Washington, DC 20052
United States

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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