Working Paper: NBER ID: w23350
Authors: Michael Carlos Best; Jonas Hjort; David Szakonyi
Abstract: Bureaucrats implement policy. How important are they for a state’s productivity? And do the tradeoffs between policies depend on their effectiveness? Using data on 16 million public purchases in Russia, we show that 39 percent of the variation in prices paid for narrowly defined items is due to the individual bureaucrats and organizations who manage procurement. Low-price buyers also display higher spending quality. Theory suggests that such differences in effectiveness can be pivotal for policy design. To illustrate, we show that a common one—bid preferences for domestic suppliers—substantially improves procurement performance, but only when implemented by ineffective bureaucrats.
Keywords: bureaucracy; public procurement; state effectiveness; policy design
JEL Codes: H11; O2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Bureaucratic effectiveness (D73) | Procurement outcomes (H57) |
| Individual bureaucrats (D73) | Bureaucratic effectiveness (D73) |
| Organizations (L39) | Bureaucratic effectiveness (D73) |
| Moving bureaucrats from lowest to highest quartile of effectiveness (D73) | Procurement expenditures (H57) |
| Bid preferences for domestic suppliers + Less effective bureaucrats (H57) | Procurement performance (H57) |