Blog: Governance and Institutions

By Michael Best, Jonas Hjort, and David Szakonyi

First posted on September 18, 2017

Best, Szakonyi and Hjort (2017) utilize state procurement as an outcome variable to evaluate bureaucratic efficacy in Russia from 2011 to 2015, much in the way that diagnostics of effectiveness in firms measured by indicators such as sales, costs and profits would suggest where a firm can be improving.

They find that individual bureaucrats and organizations have a large impact on whether purchases are cost-effective or not, accounting for up to 60% of the total variation.

This suggests that individuals matter, and that policy design that might be beneficial for the top performers would be detrimental to the laggards, and vice versa. The broader takeaway is that a little bit of ingenuity, and making recommendations according to the recipient and their current abilities, might be more effective than just issuing blanket recommendations.

Citation for the full article:

Best, M, J Hjort and D Szakonyi (2017), “Individuals and Organizations as Sources of State Effectiveness, and Consequences for Policy Design”, CEPR Discussion Paper No. 11968.