Regional Political Cycles in Russia
Paper will be presented at the Annual Conference on Transition Economics
Posted: 3 May 2002
The paper analyzes political business cycles in Russian regions, their magnitude, duration, focus on specific policy instruments and groups of voters, effectiveness in increasing chances for reelection, and dependence on voters' rationality and access to information. Using the comprehensive list of Russia's regional elections and regional monthly panel data between 1992 and 2002, we find strong evidence of rational opportunistic political cycles. Russia's governors increase regional spending on social programs, healthcare, education, and industrial subsidies and reduce budgetary wage arrears before elections. Right after the elections, public expenditures fall dramatically and a yearlong recession occurs. Cycles in the real policy instruments are accompanied by very intensive mass media support. The poorest stratum of population is targeted by the cyclical policies. These policies increase political popularity of incumbent governors. Our results do not show any evidence of relationship between the amplitude of the cycles and the rationality of voters and their access to information.
Keywords: Political business cycles, Russia, regions, budgets, fiscal policy
JEL Classification: H72, P35, P16, E32
Suggested Citation: Suggested Citation