How Bureaucrats Impact Prices and Quality in Russia’s Procurement Process

Individuals and Organizations as Sources of State Effectiveness

Bureaucrats play a crucial role in a state’s productivity, affecting the prices paid for goods and services. In Russia, individual bureaucrats and organizations managing procurement have a significant impact, with 39% of price variation attributed to them. Effective bureaucrats tend to achieve lower prices while maintaining quality. The study suggests that policy trade-offs depend on the effectiveness of bureaucrats. For example, policies favoring domestic suppliers can enhance procurement performance, particularly when implemented by less effective bureaucrats.

Best, Michael Carlos, Jonas Hjort, and David Szakonyi. 2023. “Individuals and Organizations as Sources of State Effectiveness.” American Economic Review, 113 (8): 2121-67.

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