This article provides estimates of a social discount rate (SDR) to inform government policy in Russia. We find that a SDR should be determined for the whole country as well as for particular regions. We apply the social rate of time preferences approach and estimate values for public sector projects at national and regional levels. All calculations are based on data from the Federal State Statistics Service of Russia. Findings help the decision-making process in the public sector of economics. Suggestions are useful for Russia as well as for post-Soviet countries and other developing economies with regional diversity.
This article analyses how the intensification of centralized monitoring within public organization may impact incentives for efficiency in those divisions of the organization that have different levels of financial autonomy. The efficiency of divisions’ activities was estimated through their procurement effectiveness. All the divisions were classified as non-commercial units (NCU) funded by the government or as income earning units (IEU) operating in the market and having broader financial autonomy. The results show that under standard monitoring, the IEU had more efficient procurements compared to the NCU. After intensification of centralized monitoring, the differences in performance became insignificant. These findings show that stricter monitoring is efficient for organizations with soft budget constraints, while for organizations with hard budget constraints it is preferable to use more flexible regulations.
The combination of two reforms in Russia, reform of public-sector entities and of public procurement, enables us to estimate the results of a transition from rigid to more flexible regulations in public procurement (PP). We consider two public universities in 2011–2012. The procurements of one university were regulated by rigid Federal Law during the entire period; the procurements of the other university were regulated by Federal Law until June 2011 and then by a more flexible regulation. Using the difference-in-differences methodology, we assess how the transition to this new regulation affects the main PP parameters. We show that more flexible regulation leads to a decline in bid competition but improves contract execution.