Individuals and Organizations as Sources of State Effectiveness
American Economic Review
vol. 113,
no. 8, August 2023
(pp. 2121-67)
Abstract
Bureaucrats implement policy. How important are they for a state's productivity? And do the trade-offs between policies depend on their effectiveness? Using data on 16 million public purchases in Russia, we show that 39 percent of the variation in prices paid for narrowly defined items is due to the individual bureaucrats and organizations who manage procurement. Low-price buyers also display higher spending quality. Theory suggests that such differences in effectiveness can be pivotal for policy design. To illustrate, we show that a common one—bid preferences for domestic suppliers—substantially improves procurement performance, but only when implemented by ineffective bureaucrats.Citation
Best, Michael Carlos, Jonas Hjort, and David Szakonyi. 2023. "Individuals and Organizations as Sources of State Effectiveness." American Economic Review, 113 (8): 2121-67. DOI: 10.1257/aer.20191598Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H57 National Government Expenditures and Related Policies: Procurement
- H83 Public Administration; Public Sector Accounting and Audits
- L14 Transactional Relationships; Contracts and Reputation; Networks
- P26 Political Economy and Comparative Economic Systems; Property Rights