1. 1 The CPSU Legacy and the Economic and Political Institutions in Russian Regions Alexander Libman Frankfurt School of Finance & Management and Russian Academy of Sciences (based on joint work with Anastassia Obydenkova, UPF)

2. 2 Motivation Legacies of the Socialist past in post-Socialist countries An arguably important factor in the development of CEE and CIS countries But where do these legacies come from? (LaPorte and Lusser 2011)  Institutional: survival of Socialist institutional structures (bureaucracies, parties etc.)  Behavioral: people still use practices inherited from the Socialist past  Attitudinal: attitudes of the public and of various social groups are influenced by myths and reality of the Socialist past And are all post-Socialist countries (and their regions) exposed to the same legacies to the same extent?  Differences in the models of Socialism in CEE countries and the USSR  Different level of control and propaganda in various parts of the same country?  Differences in the mode of governance in the same country (“southern” republics of the USSR or agricultural/industrial regions) This paper: a particular factor associated with survival of legacies  The “penetration” of the CPSU membership in different regions of the Russian Federation

3. 3 Russian regions and CPSU legacies Heterogeneity of Russian regions 1990s: proliferation of heterogeneous sub-national regimes (“isles of democracy” and “isles of autocracy”) 2000s: variations in the level of federal control and monitoring => variations in the bureaucratic practices Furthermore, strong variations in paths of economic development How could CPSU legacy matter? (assuming there was a variation in the share of CPSU members in different regions) CPSU membership  Indoctrination  Career concerns and opportunistic behavior  Rudimentary form of political participation (“party saturation” literature) Effects of CPSU legacy  Public attitude => does it survive over time? does it spread?  Composition of political elites => resolution of uncertainty in the initial moment of transition and path-dependence  Elite networks (governments and business)

4. 4 Variations of CPSU membership Problem No data on the size of party organizations in regions available (maybe archival research)? Solution CPSU congress: each delegate from a certain number of CPSU members E.g. XXV congress (1976): 1 delegate from 3,000 CPSU members Count the size of regional delegations (published) and obtain the proxy for CPSU penetration Evidence Very strong variation across Russian regions Relative persistence over time across regions (XXV congress vs. XIX conference)

5. 5 Variations of CPSU membership

6. 6 Russian regions and CPSU legacies Proxies for institutions in Russian regions Sub-national democracy:  Carnegie Center: 1991-2001  Carnegie Center: 2000-2004 = > e.g. excellent predictor for voting outcomes of 2011  Ten sub-indices (elections, press, balance of power within elites etc.) 2000-2004 Corruption:  Transparency International / INDEM 2002: real corruption  Transparency International / INDEM 2002: perceived corruption  FOM 2010: real corruption  FOM 2010: perceived corruption  FOM 2011: real corruption  Carnegie Center: 2000-2004 Approach  Regress democracy / corruption indicators on the share of CPSU members in 1976 in the regional population and a set of other controls typically used in the literature

7. 7 Result: Democracy (1)(2)(3)(4)(5)(6)(7) Education9.93410.4748.8733.094-10.999.435-13.083 (25.918)(24.898)(25.831)(25.963)(30.565)(26.027)(29.814) Income, 2000-20041.440***0.6090.5900.6390.1591.461***1.725*** (0.528)(0.438)(0.451)(0.395)(0.443)(0.524)(0.619) Share of Russians16.383***11.327*6.8357.6596.57615.117*** (5.564)(5.728)(6.667)(6.396)(6.674)(3.347) Dummy republic0.8610.572-0.2310.1790.726 -6.746*** (3.129)(2.977)(3.130)(2.890)(3.111) (2.202) Distance from Moscow-0.438*-0.484**-0.533***-0.501**-0.436*-0.451**-0.541** (0.224)(0.198)(0.194)(0.200)(0.236)(0.221)(0.230) Oil and gas, 2000-2004-0.005-0.003-0.004-0.005-0.004-0.005-0.008** (0.004)(0.003) (0.004) Urbanization, 2000-2004 267.952***272.548***256.601***265.760*** (72.522)(73.267)(72.315)(70.255) Dummy Islam -4.459-4.588-5.388 (3.156)(3.204)(3.297) Openness to trade, 2000-2004 75.365***78.164*** (27.497)(27.420) Territory 1.65 (1.106) Population, 2000-2004 0.001 (0.000) Share of CPSU members, 1976-189.661**-222.347***-221.306***-225.007***-177.792**-193.013**-158.648** (78.715)(70.263)(71.012)(67.142)(68.551)(76.236)(76.010) Constant22.651***12.828*16.891**17.231**16.646**24.092***38.406*** (6.938)(7.050)(7.333)(7.121)(7.369)(4.947)(5.388) Observations71 R-squared0.3750.4840.5030.5280.5490.3750.291 City of MoscowYes St. Petersburg and Leningrad regionNo Former lower-level unitsNo

8. 8 Results: Corruption (1)(2)(3)(4)(5)(6)(7)(8)(9)(10) Income per capita-0.0020.001 0.011**0.014**0.012**0.011*0.008 (0.005) (0.006) Population0.0140.010.0050.054***0.047**0.049*** 0.041*0.038*0.041* (0.012)(0.011)(0.013)(0.018)(0.019)(0.018)(0.017)(0.020)(0.021) Share of urban population-0.007*** -0.008***-0.009***-0.008***-0.007** -0.007*** (0.002) (0.003)(0.002) (0.003) Unemployment rate, %, 2009-0.011 -0.012-0.006-0.005-0.013 -0.005-0.004-0.005 (0.011) (0.010)(0.011)(0.010) Share of natural resource extraction in GDP -0.001 -0.003*-0.003**-0.002 -0.001-0.002 (0.002) Share of SOCs -0.271-0.171-0.103-0.187-0.1800.0400.1090.013 (0.402)(0.356)(0.361)(0.329)(0.334)(0.331)(0.346)(0.347) Number of companies in the region, ‘000, 2009 -0.001*** (0.000) Size of bureaucracy -0.005-0.008 -0.008*-0.007 (0.005) Federal transfers 0.324*0.315*0.1260.1410.112 (0.176)(0.187)(0.163)(0.168)(0.190) Disance from Moscow 0.0010.000-0.0010.001 (0.008) (0.009) Education 1.786**1.933**1.717** (0.675)(0.732)(0.733) Ethnic Russians -0.024 (0.116) Dummy republic -0.030 (0.044) Share of CPSU members5.966***5.437***5.558***8.176***8.523***7.810***7.840***7.098***6.646***7.260*** (1.612)(1.743)(1.722)(1.719)(1.809)(1.641)(1.649)(1.737)(2.034)(1.942) Constant0.704***0.726***0.829***0.443**0.429*0.407*0.416*0.0900.0740.123 (0.205)(0.209)(0.243)(0.217)(0.218)(0.220)(0.225)(0.288)(0.293)(0.330) Observations65 R2R2 0.3510.3570.3620.4570.4640.509 0.5730.5760.574

9. 9 Results DemocracyCorruption

10. 10 Alternative explanations Aging population and persistence of legacies Controlling for share of elderly population => results stay robust Role of contemporary Communist party (CPRF) Controlling for electoral support of CPRF at various elections => results stay robust Industrial structure of the regions and late Soviet mode of governance Controlling for industrial structure => results stay robust Attention of the central government Controlling for the number of presidential visits into the regions => results stay robust Non-random distribution of CPSU members Controlling for Soviet-period characteristics of regions (education, proxies of well- being etc.) => results stay robust

11. 11 Conclusion and outlook Regions with strong CPSU penetration in the past … are less democratic and more corrupt… … even twenty years after the collapse of the Soviet Union What else? (work in progress) … but these regions also have lower income inequality Is Russia still a “post-Communist” country?