Theocharis Grigoriadis

Direct democracy and local public finances under cooperative federalism

This paper exploits the introduction of the right of referenda at the local level in the German state of Bavaria in 1995 to study the fiscal effects of direct democracy. In the first part of the paper, we establish the relationship between referenda activity and fiscal performance by using a new dataset containing information on all 2500 voter initiatives between 1995 to 2011. This selection on observables approach, however, suffers from obvious endogeneity problems in this application. The main part of the paper exploits population dependent discontinuities in the signature and quorum requirements of referenda to implement a regression discontinuity design (RDD). To safeguard against co-treatments that might affect fiscal outcomes simultaneously at the same thresholds, we validate our results by extending the RDD approach to a difference-in-discontinuity (DiD) design. By studying direct legislation in an archetypical cooperative federation as Germany, our paper extends the literature to a novel institutional setting. The results indicate that in our setting – and in contrast to most of the evidence from Switzerland and the US – direct democracy causes an expansion of local government budgets.

Direct Democracy and Local Public Finances under Cooperative Federalism: Direct democracy and local public finances under cooperative federalism

This paper exploits the introduction of the right of referenda at the local level in the German state of Bavaria in 1995 to study the fiscal effects of direct democracy. In the first part of the paper, we establish the relationship between referenda activity and fiscal performance by using a new dataset containing information on all 2500 voter initiatives between 1995 to 2011. This selection on observables approach, however, suffers from obvious endogeneity problems in this application. The main part of the paper exploits population dependent discontinuities in the signature and quorum requirements of referenda to implement a regression discontinuity design (RDD). To safeguard against co-treatments that might affect fiscal outcomes simultaneously at the same thresholds, we validate our results by extending the RDD approach to a difference-in-discontinuity (DiD) design. By studying direct legislation in an archetypical cooperative federation as Germany, our paper extends the literature to a novel institutional setting. The results indicate that in our setting - and in contrast to most of the evidence from Switzerland and the US - direct democracy causes an expansion of local government budgets.

Aid Effectiveness and Imperfect Monitoring: EU Development Aid as Prisoner's Dilemma

This paper analyzes the effectiveness of EU development aid to the economies of the former Soviet Union under conditions of imperfect monitoring. Transnational sovereignty partnerships (TSPs) suggest a novel type of aid recipient and an institutional component of the TACIS program. TSPs are composed of distributive planners and developmental entrepreneurs. Distributive planners set the development strategy and developmental entrepreneurs implement it based on EU development aid. I model the delivery of EU development aid to the former Soviet Union as an infinitely repeated Prisoner’s Dilemma with private signals. Aid effectiveness occurs when the European Commission signals that it will finance another TSP, without reducing its expected profit from aid implementation.

Ancestry, Diversity & Finance: Evidence from Transition Economies

In this paper, we analyze the growth effects of historical and biological ancestry, diversity and financial development in transition economies. We show that the common indicators of ethnolinguistic fractionalization, state history and genetic distance yield significant results and to some extent transform the impact of finance on growth in East-Central Europe and the former Soviet Union. Deep ethnolinguistic cleavages produce insignificant results, whereas at intermediate and lower levels of aggregation diversity is likely to significantly improve the effect of finance on growth. Similarly to finer ethnolinguistic cleavages, genetic distance from the United States also favorably increases the relevance of financial development for growth. However, state history as a proxy for long-run ancestral exposure to institutions, political organization and centralization reinforces the negative growth effect of financial development. We argue that financial development is inclined to resolve problems arising from coordination failures and absence of trust in diverse societies by easing liquidity constraints and offering incentives for entrepreneurship to minority groups. In contrast, long state history is likely to generate extractive institutions that facilitate the provision of soft budget constraints. Genetic distance from the United States induces higher reliance on continental rather than Anglo-Saxon financing practices, and therefore increases dependence on banks rather than bonds or equity for external liquidity purposes.

Borderland Russians: identity, narrative and international relations

religiosity, this of the prophet and healer Vanga (Evangelia) Pandeva Gushterova. Examining the case, Valtchinova argues that the ‘remaking of religion under socialism amounted to taking it outside ecclesiastical institutions, giving it a rational face, and putting it into a “scientific” mold, thereby dissolving “religiosity” into the blurred “magical-religious-medical field”’ thus depicting a ‘popular religiosity that was denigrated in the dominant discourses but de facto tolerated.’ Another case of official secularism that concealed a sophisticated political manipulation of religion is presented in Anca Sincan’s essay ‘From Bottom to the Top and Back: On How to Build a Church in Communist Romania.’ According to the support the regime needed from various churches, and in line with the old dictum ‘divide and rule’, it favored one church over another. Thus, the Catholic Church received authorization from the regime to build churches much more easily than its Protestant counterpart. Finally, Bruce Berglund’s final essay ‘Drafting a Historical Geography of East European Christianity’ is a brilliant historical-geographical analysis of the regions under investigation, both as conceptual as well as geographic entities depicting in a thoughtful and sensitive way the multifaceted character and the dynamic impulses that define religious identity. In all, the volume is a valuable contribution to the historical analysis of Mitteleuropa, though less ambitious than its title suggests.

The TACIS Program in Russia, Ukraine, and Central Asia, 1992–2007

This chapter explores the effectiveness of EU development aid to the economies of the former Soviet Union under conditions of imperfect monitoring. The effect of development aid on economic growth and the role of the institutional environment in aid effectiveness are discussed in the light of recent literature. I model the delivery of EU development aid to the former Soviet Union as an infinitely repeated Prisoner’s Dilemma with private signals. Aid effectiveness occurs when the European Commission is able to signal that it will finance another TSP, without reducing its expected profit from aid implementation. Evidence from the implementation of the TACIS Program in Russia, Ukraine, and Central Asia between 1992 and 2007 indicates that contractual completion does not always imply aid effectiveness. Institutional deficiencies in transition economies and miscommunications between donor conditionality and the recipient’s institutional capacity suggest the main constraints to the effectiveness of TACIS Program. The distinction between distributive planners and development entrepreneurs reveals a hierarchical relationship between state and civil society in the transition world.

Europe, Russia, and Global Development

This chapter discusses the course of EU development aid to Russia and Eurasia after the completion of the TACIS Program in 2007. Russia’s emergence as a donor and the formation of Eurasian Economic Community (EurasEC) have shifted EU–Russian relations in the direction of competition rather than cooperation. Regional economic integration in the former Soviet Union has been facilitated by EU aid contracts that allowed recipient governments in Russia and Eurasia to follow parallel modernization tracks. Complementarity and regulatory coordination continue to remain challenges in aid governance. The introduction of the Eastern Partnership Program for Ukraine, Belarus, Moldova, Armenia, Georgia, and Azerbaijan and the emergence of an EU strategy for Central Asia have created two homocentric priority circles for EU development aid. The European and South Caucasus lands of the former Soviet Union are treated as the EU near abroad, whereas Central Asia has been included in the same group with Latin America, East and South Asia, the Gulf region, and South Africa. The differences between the two main policy instruments, the European Neighborhood and Partnership Instrument (ENPI) and the Development Cooperation Instrument (DCI), reveal the divergent degrees of EU commitment toward Russia and Eurasia.

Aid Effectiveness and Donor Preferences

This chapter analyzes aid effectiveness from the donor’s perspective. An aid contract is effective when the donor observes her preferred levels of economic cooperation and institutional change on the territory of the recipient. The distinction between reciprocal, normative, and just donors proposes three different types of aid effectiveness. The British DFID, the German BMZ and DG-RELEX differentiate along the lines of donors concentrating in trade and investment profits, donors that advance the implementation of institutional change and donors that put equal weight in both strategies. The existence of numerous veto players in the German aid system and the singularity of administrative organization in the British aid system operationalize the distinction between normative and reciprocal donors. The aid system of the EU is defined as just because economic cooperation or institutional change alone is treated as insufficient for aid effectiveness. Hence, the effectiveness of the Technical Assistance to the Commonwealth of Independent States Program (TACIS) has been due to the strategies of EU bureaucrats and their treatment of antithetical donor preferences as complementary in the process of aid implementation.

Aid Effectiveness and the Soft Budget Constraint

This chapter analyzes EU development aid as the new soft budget constraint in the former Soviet Union. Aid effectiveness is defined as contractual completeness. The collaboration between federal or subnational administrative bodies on the one hand and private businesses or civic organizations on the other produces a novel definition of sovereignty. Transnational sovereignty suggests that development policy is decided by the recipient and financed by the donor. Transnational sovereignty partnerships (TSPs) constitute a novel type of aid recipient and an institutional component of the TACIS program. TSPs consist of distributive planners and developmental entrepreneurs. Distributive planners define domestic economic policy and developmental entrepreneurs implement it based on EU development aid. This is the core of transnational sovereignty in the hybrid institutional context of the European Union. A decision issued by the European Commission in Brussels provides the financial and institutional basis for the implementation of a development project in Russia and Eurasia, where central or local administrations are the initial planners and the final beneficiaries. The TACIS Program bailed out domestic development projects, whose final output would have otherwise been very uncertain.

A Political Theory of Russian Orthodoxy: Evidence from Public Goods Experiments

In this paper, I test the effects of religious norms on the provision of public goods. My evidence is drawn from public goods experiments that I ran with regional bureaucrats in Tomsk and Novosibirsk, Russia. I introduce three treatments, which I define as degrees of Eastern Orthodox collectivist enforcement: 1. Solidarity, 2. Obedience, and 3. Universal discipline. I argue for the existence of an Eastern Orthodox hierarchy in the Russian bureaucracy that facilitates the delivery of public goods under conditions of universal discipline and the principal´s overfulfillment. Eastern Orthodox hierarchy is enforced through universal disciplinary monitoring, which induces collective punishment when the public good is not delivered. Contrary to conventional wisdom about freeriding in administrative institutions, higher ranks in Russian bureaucracies are associated with less freeriding.