Scott Gehlbach

Investment without Democracy: Ruling-Party Institutionalization and Credible Commitment in Autocracies

What explains private investment in autocracies, where institutions that discourage expropriation in democracies are absent? We argue that institutionalized ruling parties allow autocrats to make credible commitments to investors. Such parties promote investment by solving collective-action problems among a designated group, who invest with the expectation that the autocrat will not attempt their expropriation. We derive conditions under which autocrats want to create such parties, and we predict that private investment and governance will be stronger in their presence. We illustrate the model by examining the institutionalization of the Chinese Communist Party.

Private Investment and the Institutionalization of Collective Action in Autocracies: Ruling Parties and Legislatures

Despite the absence of formal institutions to constrain opportunistic behavior, some autocracies successfully attract private investment. Prior work explains such success by the relative size of the autocrat’s winning coalition or the existence of legislatures. We advance on this understanding by focusing on the key constraint limiting coalition size and legislative efficacy: organizational arrangements that allow group members to act collectively against the ruler. We introduce three new quantitative measures of the ability of ruling party members to act collectively: ruling-party institutionalization, the regularity of leader entry, and the competitiveness of legislative elections. These characteristics are robustly associated with higher investment. Our evidence also points to an effect on the risk of expropriation in nondemocracies.

The Contribution of Veto Players to Economic Reform

Contrary to the conventional understanding that reform is more difficult when veto players are numerous, we show formally that veto players may encourage policy change by weakening the power of special interests that prefer inefficient reform outcomes. Using the same model, we demonstrate that reform reversals are less likely in the presence of multiple veto players, implying that a constitutional framework conducive to initial reforms may also lock in those achievements over time. We find support for our theoretical perspective in a study of the relationship between veto players and reform in Eastern Europe and the former Soviet Union.

A Formal Model of Exit and Voice

I re-examine Hirschmans classic text Exit, Voice, and Loyalty through a game-theoretic interpretation of the relationship between exit and voice. The model, which is general and applicable to diverse environments, treats exit as a costly decision, which may be prevented through an appropriate choice of policy by the leadership of an organization. Voice – the capacity of an organizations members to participate in the setting of policy – is similarly costly, but provides a share of the surplus from avoiding exit. The formalization sheds light on the static and dynamic effects of exit, the conditions for the development of voice, the impact of loyalty, and the decision of organizational leaders to suppress voice and exit. I illustrate the model by revisiting Hirschmans analysis of exit and voice in the collapse of East German communism.

Electoral Manipulation as Bureaucratic Control

Bureaucratic compliance is often crucial for political survival, yet eliciting that compliance in weakly institutionalized environments requires that political principals convince agents that their hold on power is secure. We provide a formal model to show that electoral manipulation can help to solve this agency problem. By influencing beliefs about a rulers hold on power, manipulation can encourage a bureaucrat to work on behalf of the ruler when he would not otherwise do so. This result holds under various common technologies of electoral manipulation. Manipulation is more likely when the bureaucrat is dependent on the ruler for his career and when the probability is high that even generally unsupportive citizens would reward bureaucratic effort. The relationship between the rulers expected popularity and the likelihood of manipulation, in turn, depends on the technology of manipulation.

Reflections on Putin and the Media

A political scientist investigates the extent to which, under Vladimir Putin, the Kremlin consolidated control over the Russian media. Conceptually, a contrast is drawn between the Soviet and post-Soviet systems of media control. Data-bases are used to illuminate imbalances of television coverage of presidential candidates and public officials as well as the evolution of popular distrust of the media. Comparisons are drawn with President Alberto Fujimoris defunct regime in Peru and speculation is offered as to the fragility of the Kremlins control over the media.

The productivity consequences of political turnover: : Firm-level evidence from Ukraine's orange revolution

We examine the impact of political turnover on economic performance in a setting of largely unanticipated political change and profoundly weak institutions: the 2004 Orange Revolution in Ukraine. Exploiting census-type panel data on over 7,000 manufacturing enterprises, we find that the productivity of firms in the regions most supportive of Viktor Yushchenko increased by more than 15 percentage points in the three years following his election, relative to that in the most anti-Yushchenko regions. We conclude that this effect is driven primarily by particularistic rather than general economic policies that disproportionately increased output among large enterprises, government suppliers, and private enterprises – three types of firms that had much to gain or lose from turnover at the national level. Our results demonstrate that political turnover in the context of weak institutions can have substantial distributional effects that are reflected in economic productivity.

Electoral Institutions and the National Provision of Local Public Goods

I explore the incentives under alternative electoral institutions for national politicians to efficiently provide local public goods. Using a career-concerns model which incorporates voter ideological heterogeneity and thus allows comparison of electoral-college and majoritarian elections at the national level, I show that the aggregation of votes across localities in both electoral-college and majoritarian elections results in a weakening of incentives to efficiently provide local public goods. However, this effect is not unambiguously larger for one electoral institution or the other. Rather, electoral institutions interact with voter preferences to determine incentives. Electoral-college elections provide particularly weak incentives for national politicians to efficiently provide local public goods when there is local ideological bias for the incumbent or challenger, while such bias tends to cancel out in majoritarian elections. Further, electoral-college and majoritarian elections encourage different allocations of effort by national politicians when voters differ across localities in the degree to which they value public-goods provision. When such differences are sharp, electoral-college elections result in better public-goods provision for localities whose voters value public goods less, and majoritarian elections result in better provision for localities whose voters value public goods more.

The Consequences of Collective Action: An Incomplete-Contracts Approach

Public policy may be determined as much by what cannot be agreed to by politicians and organized interests as by what can. Focusing on the inability of organized groups to credibly promise that their members will fully report revenues to tax authorities, I develop an incomplete-contracts lobbying model that shows that the provision of collective goods may be influenced by the anticipated tax compliance of economic sectors as well as by the organization of interests. Data from a survey of firms in Eastern Europe and the former Soviet Union are broadly supportive of the theory: the ability of firms to hide revenues from tax authorities rivals conventional collective-action variables in explaining variation in collective-goods provision, but only in that part of the postcommunist world where differences in revenue hiding across sectors are especially large.

Is Putin's Popularity Real?

AbstractVladimir Putin has managed to achieve strikingly high public approval ratings throughout his time as president and prime minister of Russia. But is his popularity real, or are respondents lying to pollsters? We conducted a series of list experiments in early 2015 to estimate support for Putin while allowing respondents to maintain ambiguity about whether they personally do so. Our estimates suggest support for Putin of approximately 80%, which is within 10 percentage points of that implied by direct questioning. We find little evidence that these estimates are positively biased due to the presence of floor effects. In contrast, our analysis of placebo experiments suggests that there may be a small negative bias due to artificial deflation. We conclude that Putin’s approval ratings largely reflect the attitudes of Russian citizens.