who's to blame? punishing poor economic performance in a...

Who’s to Blame?Punishing Poor Economic Performance in a Centralized

Political System

Quintin H. Beazer1 Ora John Reuter2

1Florida State Universityqbeazer@fsu.edu

2University of Wisconsin - MilwaukeeHigher School of Economics - Moscow

reutero@uwm.edu

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 1 / 23

Political Centralization’s Poster BoyUnder Putin, Russia’s central govt. has increased control over subnational politics

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 2 / 23

Political Centralization & its Consequences

Centralization benefits leaders by giving extra control.

This is exactly what non-democratic leaders want.

But what are the political costs of centralization?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 3 / 23

Political Centralization & its Consequences

Centralization benefits leaders by giving extra control.

This is exactly what non-democratic leaders want.

But what are the political costs of centralization?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 3 / 23

Political Centralization & Blame Attributionimportant questions for performance-dependent regimes

How does political centralization affect responsibility for localoutcomes?

In a centralized system, who gets blamed when local economicperformance suffers?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 4 / 23

Economic Voting in Centralized Systemsa theoretical starting point

Voters punish elected officials for poor economic performance.

Much economic voting research asks: “What do voters do whenunclear which elected official to punish?”

ex: literature on clarity of responsibility.

In Russia’s case, we ask instead:

What do voters do when can’t punish local officials throughelections?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 5 / 23

Economic Voting in Centralized Systemsa theoretical starting point

Voters punish elected officials for poor economic performance.

Much economic voting research asks: “What do voters do whenunclear which elected official to punish?”

ex: literature on clarity of responsibility.

In Russia’s case, we ask instead:

What do voters do when can’t punish local officials throughelections?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 5 / 23

Economic Voting in Centralized Systemsa theoretical starting point

Voters punish elected officials for poor economic performance.

Much economic voting research asks: “What do voters do whenunclear which elected official to punish?”

ex: literature on clarity of responsibility.

In Russia’s case, we ask instead:

What do voters do when can’t punish local officials throughelections?

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 5 / 23

Centralization & Blame Attribution in Non-Democraciescompeting expectations

1.) Institutions under authoritarianism are window dressing.

Formal institutional changes make little difference.

Responsibility is clear and obvious (...dictator!).

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 6 / 23

Centralization & Blame Attribution in Non-Democraciescompeting expectations

2.) Institutions under authoritarianism still affect behavior.

Formal institutions shape how citizens relate to their leaders.

Institutional changes can shift responsibility for outcomes.

This view implies that, under centralization, voters punish those whoappointed poorly-performing local leaders.

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 7 / 23

Centralization & Blame Attribution in Non-Democraciescompeting expectations

2.) Institutions under authoritarianism still affect behavior.

Formal institutions shape how citizens relate to their leaders.

Institutional changes can shift responsibility for outcomes.

This view implies that, under centralization, voters punish those whoappointed poorly-performing local leaders.

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 7 / 23

Empirical Predictions

Appointed local officials → voters hold higher-level officialsresponsible for poor local economy

Elected local officials → voters do not hold higher-level officialsresponsible for poor local economy

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 8 / 23

Subnational Variation in Elected vs. Appointed Local ExecsA research design based on Russian cities

Studies comparing appointed vs elected systems haveempirical challenges:

Unobserved cross-national differences may confound results.

National electoral institutions do not vary much over time.

Within Russia, cities vary in whether or not citizens elect theirchief executive.

Variation over time and across cities (even in same region).

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 9 / 23

Subnational Variation in Elected vs. Appointed Local ExecsA research design based on Russian cities

Studies comparing appointed vs elected systems haveempirical challenges:

Unobserved cross-national differences may confound results.

National electoral institutions do not vary much over time.

Within Russia, cities vary in whether or not citizens elect theirchief executive.

Variation over time and across cities (even in same region).

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 9 / 23

Russian Municipalities DataData on roughly 200 of Russia’s largest cities

Dependent variable: vote share for United Russia in legislativeelections

Independent variables:

centralization: appointed/elected mayor

economic performance: change in unemployment

centralization × economic performance

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 10 / 23

Russian Municipalities DataData on roughly 200 of Russia’s largest cities

Control variables: press freedoms, regional political climate, workingage population, average income, past UR electoral success

Empirical strategy: generalized diff-in-diff

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 11 / 23

Regional Elections: UR Punished More for Poor EconomicPerformance in Centralized Cities

DV: United Russia Vote Share% of vote in regional legislative elections (1) (2)

Political Centralization 0.016 0.324dummy; 1 = appointed mayor (2.158) (2.136)

0.994 0.880

∆Unemployment 0.884 1.601annual change in unemp. rate (0.615) (0.561)

0.152 0.005

Centralization -3.845 -4.062× ∆Unemployment (1.570) (1.476)

0.015 0.007

Number of Observations 363 322All Control Variables No Yes

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 12 / 23

Marginal Effects of Poor Economic PerformanceConditional on Centralization

−10

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oym

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Elected Appointed

●

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Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 13 / 23

Types of Centralization: Appointments vs. Party AffiliationInvestigating a rival mechanism

DV: United Russia Vote Share

Political Centralization -2.487dummy; 1 = appointed mayor (2.812)

0.378

∆Unemployment 4.040annual change in unemp. rate (1.592)

0.012

Centralization -4.217× ∆Unemployment (1.541)

0.007

Centralization -2.842× UR member (1.733)

0.103

Number of Observations 285All Control Variables Yes

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 14 / 23

National Officials Not Blamed More in Centralized CitiesProbing the extent of blame attribution

DV: United Russia Vote Share% of vote in Duma elections (1) (2)

Political Centralization -6.566 -4.032dummy; 1 = appointed mayor (2.045) (2.267)

0.002 0.077

∆Unemployment -2.403 -1.944annual change in unemp. rate (0.771) (0.788)

0.002 0.015

Centralization 1.452 -0.106× ∆Unemployment (1.333) (1.518)

0.277 0.945

Number of Observations 476 444All Control Variables No Yes

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 15 / 23

Conclusion

Political centralization creates a trade-off for the rulinggroup.

Consolidates responsibility for local performance as well as control overlocal politics.

There are limits to blame attribution. In the Russian case,we observe:

Voters punish officials who actually appoint local leaders (regional)No punishment for officials farther from appointment process (national)

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 16 / 23

Conclusion

Political centralization creates a trade-off for the rulinggroup.

Consolidates responsibility for local performance as well as control overlocal politics.

There are limits to blame attribution. In the Russian case,we observe:

Voters punish officials who actually appoint local leaders (regional)No punishment for officials farther from appointment process (national)

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 16 / 23

Thank you in advance for comments and suggestions.

Quintin H. Beazer

qbeazer@fsu.edu

Ora John Reuter

reutero@uwm.edu

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 17 / 23

Centralization of Russian Cities Increasing Over TimeProportion of Cities with Appointed Mayors

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 18 / 23

Estimated Effects of Centralization on UR Vote ShareConditional on Unemployment

−3 −2 −1 0 1 2 3

−20

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10

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Unemploymentt − Unemploymentt−1

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Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 19 / 23

Evidence Supports Parallel Trends AssumptionA placebo test of differences prior to reforms

DV: United Russia Vote Share% of vote in regional elections

Eventual Centralization -2.653dummy; 1 = appointed mayor in future (1.751)

0.132

∆Unemployment 0.987annual change in unemp. rate (0.807)

0.223

Eventual Centralization -3.655× ∆Unemployment (3.302)

0.270

Number of Observations 238City Fixed Effects NoAll Control Variables Yes

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 20 / 23

Differences in Electoral History, by Cities’ ElectoralInstitution

Group MeansElected Appointed n1, n2 p-value

Electoral Historyin % vote share

Past Support (regional) 39.68 43.97 (124, 73) 0.04UR’s regional vote share (lagged DV) (1.27) (1.68)

Past Support (national) 34.28 43.07 (123, 61) 0.00UR’s vote share in 2003 Duma elections (0.93) (2.10)

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 21 / 23

Differences in Political Openness, by Cities’ ElectoralInstitution

Group MeansElected Appointed n1, n2 p-value

Political Opennesssubjective expert measures

Strength of Civil Society (1991-93) 2.87 2.64 (272, 109) 0.01ordinal; min=1, max=4 (0.05) (0.07)

Regional Democracy 16.12 14.03 (282, 113) 0.00composite score; min=0, max=29 (0.37) (0.62)

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 22 / 23

Results Robust to IV AnalysisUsing mayor’s age as instrument

DV: United Russia Vote Share% of vote in regional elections (Reduced) (2SLS)

Centralization (IV) -1.852 -8.768dummy; 1 = mayor ≤ 47 (1.956) (9.374)

0.345 0.350

∆Unemployment 4.857 2.193annual change in unemp. rate (2.278) (1.431)

0.034 0.125

Centralization (IV) -5.880 -12.242× ∆Unemployment (2.632) (5.463)

0.027 0.025

Number of Observations 245 245All Control Variables Yes Yes

Beazer & Reuter (FSU & UWM/HSE) Who’s to Blame? Feb 2016 23 / 23