Private Sector Policymaking

66 Pages Posted: 29 Nov 2018

See all articles by David Szakonyi

David Szakonyi

George Washington University; National Research University Higher School of Economics

Date Written: October 2, 2018

Abstract

Candidates often tout their private sector experience when running for public office. But do businessperson politicians actually govern differently? This paper argues that given their preferences and managerial expertise, businesspeople in office will adopt policies favorable to the business community and improve government efficiency. To test these claims, I collect data on over 33,000 Russian mayors and legislators and investigate policy outcomes using detailed municipal budgets and over a million procurement contracts. Using a regression discontinuity design, I find that businessperson politicians increase expenditures on roads and transport, while leaving health and education spending untouched. Prioritizing economic over social infrastructure brings immediate benefits to firms, while holding back long-term accumulation of human capital. However, businesspeople do not reduce budget deficits, but rather adopt less competitive methods for selecting contractors, particularly in corruption-ripe construction. In all, businessperson politicians do more to make government run for business, rather than like a business.

Keywords: business-government relations, Russia, policymaking, political quality

Suggested Citation

Szakonyi, David, Private Sector Policymaking (October 2, 2018). Available at SSRN: https://ssrn.com/abstract=3101095 or http://dx.doi.org/10.2139/ssrn.3101095

David Szakonyi (Contact Author)

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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