[PPT] - The Adoption of Costly VET Practices in Russias Regions Israel PowerPoint Presentation

SLIDE 1

The Adoption of Costly VET Practices in Russia’s Regions

Israel Marques II, Thomas Remington*, Vladimir Bazavluk

ICSID, NRU - Higher School of Economics *Emory University

NRU - Higher School of Economics June 06, 2017

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SLIDE 2

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

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SLIDE 3

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society

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SLIDE 4

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

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SLIDE 5

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

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SLIDE 6

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap

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SLIDE 7

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap Theoretic: Usual answer is strong civil society and/or markets

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SLIDE 8

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap Theoretic: Usual answer is strong civil society and/or markets Implications: Conditions that facilitate adoption and diffusion

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SLIDE 9

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap Theoretic: Usual answer is strong civil society and/or markets Implications: Conditions that facilitate adoption and diffusion

What regional features facilitate adoption and diffusion?

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SLIDE 10

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap Theoretic: Usual answer is strong civil society and/or markets Implications: Conditions that facilitate adoption and diffusion

What regional features facilitate adoption and diffusion? Argument: Regional state capacity to monitor local performance and Political competition facilitate Complex PPP

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SLIDE 11

Public Private Partnerships in Vocational Education

Puzzle: Spread of complex, costly forms PPP in Russia despite:

Historically weak civil society Weak bureaucratic and political accountability

Motivation

Substantive: Russian employers regularly cite skills gap Theoretic: Usual answer is strong civil society and/or markets Implications: Conditions that facilitate adoption and diffusion

What regional features facilitate adoption and diffusion? Argument: Regional state capacity to monitor local performance and Political competition facilitate Complex PPP This Paper: Region level

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SLIDE 12

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988)

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SLIDE 13

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

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SLIDE 14

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach

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SLIDE 15

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility

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SLIDE 16

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

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SLIDE 17

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

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SLIDE 18

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985) Coordinated market economies (Hall and Soskice 2001)

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SLIDE 19

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms

Coordinated market economies (Hall and Soskice 2001)

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SLIDE 20

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts

Coordinated market economies (Hall and Soskice 2001)

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SLIDE 21

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

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SLIDE 22

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

Business Associations, Labor Unions, Government Organs

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SLIDE 23

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

Business Associations, Labor Unions, Government Organs Actors make agreements and then monitor each other

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SLIDE 24

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

Business Associations, Labor Unions, Government Organs Actors make agreements and then monitor each other State adjudicates disputes

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SLIDE 25

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

Business Associations, Labor Unions, Government Organs Actors make agreements and then monitor each other State adjudicates disputes Provides specific skills by linking employers/schools

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SLIDE 26

Theoretical Background: Commitment and skill

Training = investment (Finegold and Soskice 1988) Skill Provision → commitment problems (Thelen 2004)

Firm-firm: incentives to underinvest and poach Firm-worker: maximize profits and labor flexibility Firm-school: insure skill relevancy

Varieties of Capitalism argues there are two solutions

Liberal market economies (Streeck and Schmitter 1985)

Skill allocation via market mechanisms Presupposes: low transaction costs, highi nformation, strong contracts Provides very general skills

Coordinated market economies (Hall and Soskice 2001)

Business Associations, Labor Unions, Government Organs Actors make agreements and then monitor each other State adjudicates disputes Provides specific skills by linking employers/schools

But what happens when civil society is weak and markets inefficient?

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SLIDE 27

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947)

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SLIDE 28

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

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SLIDE 29

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

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SLIDE 30

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

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SLIDE 31

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints

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SLIDE 32

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking

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SLIDE 33

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

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SLIDE 34

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

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SLIDE 35

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society

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SLIDE 36

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society Examples:

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SLIDE 37

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society Examples:

Democratic accountability (North and Weingast 1989)

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SLIDE 38

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society Examples:

Democratic accountability (North and Weingast 1989) Constitutions (Weingast 1997)

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SLIDE 39

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society Examples:

Democratic accountability (North and Weingast 1989) Constitutions (Weingast 1997) Single-party regimes (Gehlbach and Keefer 2011)

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SLIDE 40

Theoretical Background: Institutons and Co-investment

State: Violence monopoly, final arbiteer of contracts (Weber 1947) Creates perverse incentives for state actors:

Expropriation of investment (North 1990) Time inconsistent preferences (Frye 2010) Low bureaucratic effort (Weingast and Moran 1983)

PPP problematizes state participation

Weak institutions → weak constraints State: → rent-seeking/shirking Investors: → higher risk → lower investment

Traditional solutions are institutional constraints

Allow for monitoring and sanction by elites/society Examples:

Democratic accountability (North and Weingast 1989) Constitutions (Weingast 1997) Single-party regimes (Gehlbach and Keefer 2011) Federalist Structures

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SLIDE 41

Our argument:

State can take the place of civil society in CMEs:

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SLIDE 42

Our argument:

State can take the place of civil society in CMEs:

Aggregate information

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SLIDE 43

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors

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SLIDE 44

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance

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SLIDE 45

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

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SLIDE 46

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

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SLIDE 47

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats

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SLIDE 48

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats

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SLIDE 49

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats Political competition to create good incentives:

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SLIDE 50

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats Political competition to create good incentives:

Electoral accountability (North 1990)

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SLIDE 51

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats Political competition to create good incentives:

Electoral accountability (North 1990) Legislative accountability (Gehlbach and Keefer 2011)

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SLIDE 52

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats Political competition to create good incentives:

Electoral accountability (North 1990) Legislative accountability (Gehlbach and Keefer 2011) Elite cohesion and dispersion (Remington 2011)

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SLIDE 53

Our argument:

State can take the place of civil society in CMEs:

Aggregate information Link together actors Monitor performance Enforce agreements between parties

Key is accountability (Remington and Marques 2016):

Regional capacity to monitor local bureaucrats Federal capacity to monitor regiona bureaucrats Political competition to create good incentives:

Electoral accountability (North 1990) Legislative accountability (Gehlbach and Keefer 2011) Elite cohesion and dispersion (Remington 2011)

Factors above → firm confidence → costly forms of PPP Factors above → firm confidence → diffusion of PPP

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SLIDE 54

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

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SLIDE 55

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions

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SLIDE 56

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership

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SLIDE 57

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

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SLIDE 58

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

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SLIDE 59

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

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SLIDE 60

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

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SLIDE 61

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends

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SLIDE 62

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment

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SLIDE 63

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

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SLIDE 64

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

Other forms of PPP:

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SLIDE 65

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

Other forms of PPP:

Praktika

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SLIDE 66

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

Other forms of PPP:

Praktika Internships

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SLIDE 67

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

Other forms of PPP:

Praktika Internships Career Fairs

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SLIDE 68

Data and Methodology

Dependent variable comes from SPO 2012 year-end reports

1600+ Schools across all Russian regions Obligated to report on social partnership 33000+ relationships with about 30000 firms

Reports coded for:

Partnership with specific firms Form of partnership indicated

Forms of costly PPP coded:

Guaranteed jobs, wages while training, stipends Equipment donations, capital investment Standards setting, Qualification exam evaluation

Other forms of PPP:

Praktika Internships Career Fairs Field trips, festivals

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SLIDE 69

Pressence of PPP Forms Across Regions

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SLIDE 70

Data and Methodology

Dependent variables

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SLIDE 71

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted

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SLIDE 72

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

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SLIDE 73

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

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SLIDE 74

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

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SLIDE 75

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity)

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SLIDE 76

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

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SLIDE 77

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

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SLIDE 78

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

Federal executive and judicial officials per 1000 - Rosstat (↑ more capacity)

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SLIDE 79

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

Federal executive and judicial officials per 1000 - Rosstat (↑ more capacity)

3

Political Accountability (↑ accountability ↑ DV)

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SLIDE 80

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

Federal executive and judicial officials per 1000 - Rosstat (↑ more capacity)

3

Political Accountability (↑ accountability ↑ DV)

Electoral: United Russia Vote Margin (↓ more competition)

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SLIDE 81

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

Federal executive and judicial officials per 1000 - Rosstat (↑ more capacity)

3

Political Accountability (↑ accountability ↑ DV)

Electoral: United Russia Vote Margin (↓ more competition) Legislative: Businessmen legislatures - Szakonyi 2017 (↑ more representation)

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SLIDE 82

Data and Methodology

Dependent variables

Adoption: Index of how many “costly forms” regions have adopted Diffusion: Percentage of schools adoptin at least one “costly form”

Independent Variables:

1

Regional state Capacity (↑ capacity ↑ DV)

Federal transfers as a percentage of regional GRP (↓ more capacity) Public Education officials per 1000 (↓ more capacity)

2

Federal State Capacity (↑ capacity ↑ DV)

Federal executive and judicial officials per 1000 - Rosstat (↑ more capacity)

3

Political Accountability (↑ accountability ↑ DV)

Electoral: United Russia Vote Margin (↓ more competition) Legislative: Businessmen legislatures - Szakonyi 2017 (↑ more representation) Elite Cohesion: Moscow Carnegie Center Index of Democracy (↑ more cohesion)

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SLIDE 83

DV1: Number of Costly Practices Adopted

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SLIDE 84

DV2: Percentage of Schools Adopting Costly PPP

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SLIDE 85

Regression Models

DVs require different estimation strategies:

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SLIDE 86

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

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SLIDE 87

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

2

Percentage of schools: Frationalized logit with robust standard errors (GLM)

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SLIDE 88

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

2

Percentage of schools: Frationalized logit with robust standard errors (GLM)

Main Controls:

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SLIDE 89

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

2

Percentage of schools: Frationalized logit with robust standard errors (GLM)

Main Controls:

Ecnoomic: Log GRP (per capita), Share of FDI in GRP, Share of Secondary Sector in GRP

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SLIDE 90

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

2

Percentage of schools: Frationalized logit with robust standard errors (GLM)

Main Controls:

Ecnoomic: Log GRP (per capita), Share of FDI in GRP, Share of Secondary Sector in GRP Labor market: Percentage of employed college degree holders, urban population, unemployment

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SLIDE 91

Regression Models

DVs require different estimation strategies:

1

Number of costly PPP forms: Poisson model with Sandwhich robust standard errors

2

Percentage of schools: Frationalized logit with robust standard errors (GLM)

Main Controls:

Ecnoomic: Log GRP (per capita), Share of FDI in GRP, Share of Secondary Sector in GRP Labor market: Percentage of employed college degree holders, urban population, unemployment Demographic: Share of population below subsistence

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SLIDE 92

Results: Number of Costly Forms Adopted (Poisson - IRR)

Share of Transfers in GRP 0.925* (0.023) Number of Education 0.980 Workers (per 1000) (0.009) Federal Workers 0.941 (per thousand) (0.071) UR Vote Margin in Most 0.992*** Recent Regional Election (0.003) Carnegie Democracy Index 1.007 (0.011) Percentage of Businessmen 1.010* in Regional Legislature (0.006) Constant 0.111 130.714* 0.215 0.211 0.147 0.149 0.052 (0.229) (361.303) (0.391) (0.458) (0.277) (0.335) (0.104) Controls Yes Yes Yes Yes Yes Yes Yes Observations 76 76 75 76 76 76 75

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SLIDE 93

Results: Percentage of Schools Adopting a Costly Form (GLM)

Share of Transfers in GRP 0.912* (0.029) Number of Education 0.968 Workers (per 1000) (0.014) Federal Workers 0.994 (per thousand) (0.089) UR Vote Margin in Most 0.990* Recent Regional Election (0.005) Carnegie Democracy Index 1.005 (0.022) Percentage of Businessmen 2.100 in Regional Legislature (2.040) Constant 0.009 39.854 0.024 0.010 0.013 0.011 0.005* (0.028) (169.676) (0.070) (0.034) (0.040) (0.037) (0.015) Controls Yes Yes Yes Yes Yes Yes Yes Observations 74 74 73 74 74 74 73

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SLIDE 94

Robustness Checks and Caveats

Data is cross-sectional:

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SLIDE 95

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality

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SLIDE 96

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

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SLIDE 97

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

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SLIDE 98

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers

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SLIDE 99

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions

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SLIDE 100

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED

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SLIDE 101

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED

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SLIDE 102

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms

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SLIDE 103

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms Share of small firms in total firms

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SLIDE 104

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms Share of small firms in total firms Pressence of dominant business group (Zubarevich 2011)

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SLIDE 105

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms Share of small firms in total firms Pressence of dominant business group (Zubarevich 2011)

Mechanism check:

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SLIDE 106

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms Share of small firms in total firms Pressence of dominant business group (Zubarevich 2011)

Mechanism check:

IVs of interest should not shape adoption/diffusion of non-costly PPP

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SLIDE 107

Robustness Checks and Caveats

Data is cross-sectional:

We cannot rule out reverse causality Omitted variables may also be an issue

Additional Controls:

Level of federal transfers Winning ASI competitions Item individual shares of top-level OKVED Herfinahl index of top-level OKVED Absolute number of small firms Share of small firms in total firms Pressence of dominant business group (Zubarevich 2011)

Mechanism check:

IVs of interest should not shape adoption/diffusion of non-costly PPP Placebo tests confirm this

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SLIDE 108

Conclusions

Complex, costly forms of PPP appear where:

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SLIDE 109

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools

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SLIDE 110

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger

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SLIDE 111

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

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SLIDE 112

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse

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SLIDE 113

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

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SLIDE 114

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

This paper assumes: commitment → firm confidence → PPP

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SLIDE 115

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

This paper assumes: commitment → firm confidence → PPP Next papers will test this on micro-data (contract database, surveys)

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SLIDE 116

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

This paper assumes: commitment → firm confidence → PPP Next papers will test this on micro-data (contract database, surveys)

Federal capacity in the regions does little

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SLIDE 117

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

This paper assumes: commitment → firm confidence → PPP Next papers will test this on micro-data (contract database, surveys)

Federal capacity in the regions does little

Measure is very imprecise

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SLIDE 118

Conclusions

Complex, costly forms of PPP appear where:

Regional governments can monitor schools Political competition is stronger Firms occupy larger parcentages of the legislature

The same factors make it more likely these practices diffuse Consistent with our commitment framework:

This paper assumes: commitment → firm confidence → PPP Next papers will test this on micro-data (contract database, surveys)

Federal capacity in the regions does little

Measure is very imprecise Federal priorities may matter more than federal monitoring

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SLIDE 119

Policy Implications

Complex, costly forms of PPP can be forged in many ways

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SLIDE 120

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route

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SLIDE 121

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

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SLIDE 122

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

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SLIDE 123

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

Regional capacity facilitates information acquisition and monitoring

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SLIDE 124

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

Regional capacity facilitates information acquisition and monitoring Monitoring school compliance with PPP particularly important

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SLIDE 125

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

Regional capacity facilitates information acquisition and monitoring Monitoring school compliance with PPP particularly important

Not necessarily more paperwork!!!

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SLIDE 126

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

Regional capacity facilitates information acquisition and monitoring Monitoring school compliance with PPP particularly important

Not necessarily more paperwork!!! Incentive structures (funding, promotion) matter

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SLIDE 127

Policy Implications

Complex, costly forms of PPP can be forged in many ways

Strong civil society is not the only route Regional governments can also coordinate

Regional governments can play a key role:

Regional capacity facilitates information acquisition and monitoring Monitoring school compliance with PPP particularly important

Not necessarily more paperwork!!! Incentive structures (funding, promotion) matter

Structures that integrate firms into decision making also help

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SLIDE 128

Thank you in advance for comments and suggestions. Israel Marques Political Science Department and ICSID, Higher School of Economics imarques@hse.ru

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