Gimpelson and Treisman: Fiscal games and public employment

Gimpelson and Treisman. 2002. Fiscal games and public employment: A theory with evidence from Russia. World Politics 54(2):145-83.

OUTLINE

I.There is wide variation in public sector employment both across and within countries.

II.In many countries, public employment also appears to be decentralizing.

III.Existing theories

A.Wagner's Law � Economic development creates a demand for new types of government services.

B.Politicians use public employment to conceal redistribution to favored groups; it should be higher where income inequality or ethnic distribution is greater.

C.Public employment is an insurance against swings in the private sector.

IV.Russia

A.Post 1990 � "Despite a severe economic crisis that reduced private sector employment, a sharp drop in tax revenues, and a central government committed to shrinking the state, the aggregate public employment level remained quite stable, and employment in public administration mushroomed. Most of the increase appears to have occurred at the regional and local levels."

B."It was not the regions with the lowest revenues or the greatest demand for health and education services that ran up arrears the fastest. Governors who felt relatively less politically sensitive to a strike could push the situation closer to the brink and pass a greater share of public sector wage costs onto Moscow" (178).

QUESTION:

Last year, Putin changed the way regional governors are appointed. Now, he has much more control over who is governor and for how long. I'm curious if this reform changed the problem (since the central government can now easily punish any governors that do this).