Performance incentives and economic growth: regional officials in Russia and China

Abstract

How does the degree of centralization and decentralization of political control affect economic performance? To investigate this question, we gather and analyze a comprehensive original data-set measuring the performance, career paths, and incentives of regional officials in China and Russia during the last 15 years. Both China and Russia combine centralized personnel selection with substantial administrative autonomy for regional officials, but differ substantially with respect to the economic outcomes produced by their bureaucratic systems. We find that in contrast to China, regional leaders in Russia are unlikely to be promoted for economic or social performance, have a lower turnover, are almost never transferred from one region to another, have less experience in executive positions, are more likely to come from the region they govern than their Chinese counterparts, and are not encouraged to show initiative in economic affairs and engage in economic policy experimentation.