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Title:Helping hand or grabbing hand? State bureaucracy and privatization effectiveness PDF Logo
Authors:Brown, J. David
Earle, John S.
Gehlbach, Scott
Issue Date:2008
Series/Report no.:Upjohn Institute Working Paper 08-142
Abstract:Why have economic reforms aimed at reducing the role of the state been successful in some cases but not others? Are reform failures the consequence of leviathan states that hinder private economic activity, or of weak states unable to implement policies effectively and provide a supportive institutional environment? We explore these questions in a study of privatization in postcommunist Russia. Taking advantage of large regional variation in the size of public administrations, and employing a multilevel re-search design that controls for pre-privatization selection in the estimation of regional privatization effects, we examine the relationship between state bureaucracy and the impact of privatization on firm productivity. We find that privatization is more effective in regions with relatively large bureaucracies. Our analysis suggests that this effect is driven by the impact of bureaucracy on the post-privatization business environment, with better institutional support and less corruption when bureaucracies are large.
Subjects:privatization
bureaucracy
economic reform
Russia
JEL:H11
L33
P23
P26
P37
P48
Document Type:Working Paper
Appears in Collections:Upjohn Institute Working Papers, W. E. Upjohn Institute for Employment Research

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