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Working paper

Political Loyalty vs Economic Performance: Evidence from Machine Politics in Russia’s Regions

Rochlitz M.
Electoral authoritarian regimes often rely on patron-client relationships and political machines to win elections. While a growing literature has focused on the reasons why authoritarian regimes might want to hold elections, the economic consequences associated with the need to win elections have been less intensely studied. In this paper, we argue that while holding elections might offer authoritarian regimes a range of informational and other advantages in the short and medium run, the long-term economic costs can be significant and potentially destabilizing. This effect is especially strong in transition economies, where outdated and inefficient economic structures might be kept alive for political reasons. The theory is tested with an original dataset of gubernatorial appointments from a leading electoral authoritarian regime, the Russian Federation. We find that by incentivizing regional governors to use their political machines to win elections for the regime, the Kremlin effectively punishes those governors that are successfully developing their regional economies, with the effect being especially strong in regions where a high percentage of the population lives in Soviet-era single company towns.