Papers by Nikita Zakharov
Analyzing law enforcement data on corruption incidents for a panel of 79 Russian regions for the ... more Analyzing law enforcement data on corruption incidents for a panel of 79 Russian regions for the period 2004-2007, we find that the relative salaries of bureaucrats determine corruption levels: Corruption declines as relative salaries rise up to a turning point, beyond which corruption rises again. Other important determinants are the strength of law enforcement, available rents through government budgets and natural resources, education levels, unemployment rates, and income inequality.
British Journal of Political Science
This article investigates the determinants and consequences of manipulating COVID-19 statistics i... more This article investigates the determinants and consequences of manipulating COVID-19 statistics in an authoritarian federation using the Russian case. It abandons the interpretation of the authoritarian regime as a unitary actor and acknowledges the need to account for a complex interaction of various bureaucratic and political players to understand the spread and the logic of manipulation. Our estimation strategy takes advantage of a natural experiment where the onset of the pandemic adjourned the national referendum enabling new presidential terms for Putin. To implement the rescheduled referendum, Putin needed sub-national elites to manufacture favourable COVID-19 statistics to convince the public that the pandemic was under control. While virtually all regions engaged in data manipulation, there was a substantial variation in the degree of misreporting. A third of this variation can be explained by an asynchronous schedule of regional governors’ elections, winning which depends ...
SSRN Electronic Journal, 2022
We investigate the relationship between oil windfalls and income inequality using the subnational... more We investigate the relationship between oil windfalls and income inequality using the subnational data of one of the resource-richest and most unequal countries in the world-Russia. While previous literature produced contradictory findings due to the use of an aggregate measure of oil rents mainly in cross-national settings, we focus exclusively on oil rents that accrue to the subnational governments across one country. Our estimation strategy takes advantage of the two specific features of Russian oil taxation: 1) the policy change when sharing oil extraction taxes with local budgets was discontinued; and 2) the oil tax formula being tied directly to the international oil prices making oil price shocks an exogenous measure of change in oil rents. When we look at the period with oil tax revenues shared with the regional governments, we find that oil windfalls had increased income inequality and benefited the wealthiest quintile of the population in regions with more intense rentseeking. Further, positive oil price shocks combined with greater rent-seeking reduced the share of labor income but increased the income share from unidentified sources traditionally associated with corruption. These effects of oil windfalls disappeared after the Russian government discontinued oil tax revenue sharing with regional governments. Finally, we examine some political implications of rising inequality due to the appropriation of oil windfalls. We find a positive effect of rising inequality on the frequency of protests associated with grievances among the poor and disadvantaged social groups; this effect, however, exists only in relatively democratic regions.
A low prevalence of smokers among the confirmed patients with COVID-19 has been reported by multi... more A low prevalence of smokers among the confirmed patients with COVID-19 has been reported by multiple hospital-based studies, and this observation gave rise to a hypothesis that smoking has a protective effect against the novel coronavirus. We test this prediction in a population-based study across the US states and use an instrumental variable approach to address the endogeneity of smoking rates. We find that a higher prevalence of smoking has a significant negative effect on the spread and the severity of the COVID-19 pandemic across the US state: it decreases the per capita number of registered cases, the case fatality rate, and the excess mortality. The protective effect is more pronounced in subgroups of the population that are more likely to be smokers: men of all ages and females of the older cohort. Our findings are robust to the inclusion of a broad range of control variables, exclusion of outliers, and placebo tests. Despite the protective effect against the COVID-19, smoki...
SSRN Electronic Journal, 2018
This paper argues that corruption in Russia is systemic in nature. Low wage levels of public offi... more This paper argues that corruption in Russia is systemic in nature. Low wage levels of public officials provide strong incentives to engage in corruption. As corruption is illegal, corrupt officials can be exposed any time, which enforces loyalty towards the powers that be; thus corruption is a method of governance. We trace the systemic corruption back to the Mongolian empire and demonstrate its persistence to the current regime. We show the geographic distribution of contemporary corruption within Russia, survey the literature on the causes, consequences, and cures of corruption in Russia, and discuss entry points to fighting it.
SSRN Electronic Journal, 2020
This paper investigates the determinants and consequences of manipulating coronavirus statistics ... more This paper investigates the determinants and consequences of manipulating coronavirus statistics in an authoritarian federation; in particular, we look at how the career concerns of local politicians and the regional free press determine the under-reporting of COVID-19 mortality at the sub-national level in Russia. Our estimation strategy takes advantage of a natural experiment where the onset of the pandemic has adjourned the national referendum enabling new presidential terms for Vladimir Putin. To implement the rescheduled referendum, the Russian government needed the help of sub-national elites in manufacturing favorable COVID-19 statistics to convince the public that the pandemic is under control. While virtually all regions engaged in data manipulation, as we show by comparing the official data on COVID-19 mortality published in real-time and the excess mortality reported by the authorities only after the referendum, there was a substantial variation in the degree of misreporting. We show that a third of the variation can be explained solely by an exogenously set asynchronous schedule of governors’ elections, winning which depends almost exclusively on the support from the federal authorities. We find a robust causal relationship between the proximity to the governor’s election and the under-reporting of mortality associated with COVID-19 before the referendum, but not after when the political incentives from the federal center vanished. The local free press becomes a strong predictor of less under-reporting of COVID-19 mortality after the referendum. Looking at the consequences of the data manipulations, we find that under-reporting undermines individual trust in official statistics and decreases unresponsiveness of self-isolating behavior to changes in official COVID-19 mortality.
Economics Letters, 2019
The paper proposes an asymmetric relationship between oil rents and institutions such that only p... more The paper proposes an asymmetric relationship between oil rents and institutions such that only positive oil windfalls adversely affect institutional quality, and negative oil windfalls have no impact. We test this theory empirically by studying the dynamics of institutional quality in Russian regions. We find that increases in tax revenues caused by exogenous positive oil price shocks do not change regional income but increase corruption and reduce regional democracy and governance quality; declines in tax revenues from negative oil price shocks do not affect institutional quality but decrease regional income.
European Journal of Political Economy, 2018
This paper investigates the causal relationship between corruption and fixed capital investment i... more This paper investigates the causal relationship between corruption and fixed capital investment in Russian regions. The panel data on corruption allow to control for unobserved heterogeneity with fixed effects estimation. We address the problem of endogeneity by introducing novel instrumental variables for corruption: the presence of free press and violations of journalists' rights. Our main result is the strong negative effect of corruption on aggregate investment in fixed capital. Disaggregating investment by ownership, we find that corruption decreases private investment, but not investment made by state-owned companies. The effect is larger for companies with foreign ownership. We also observe a strong negative relationship between regional import of capital goods and corruption.
The Journal of Law and Economics, 2016
We analyze the determinants of corruption in Russia using law enforcement data on corruption inci... more We analyze the determinants of corruption in Russia using law enforcement data on corruption incidents for a panel of 79 Russian regions for the period 2004-13. We find that the relative salaries of bureaucrats determine corruption levels: corruption declines as relative salaries rise, yet at strongly diminishing rates. Furthermore, we show that even very limited media freedom helps to curtail corruption. Other important determinants are the strength of law enforcement, education levels, and unemployment rates. 4 World Bank, Data: GDP Growth (Annual %) (http://data.worldbank.org/indicator/NY.GDP .MKTP.KD.ZG/countries/1W-RU?display=graph). 5 Even mass social protests against electoral fraud during the parliamentary election in December 2011 were widely regarded as having failed to influence the current political situation (Volkov 2012).
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Papers by Nikita Zakharov