M-form hierarchy with poorly-diversified divisions: A case of Khrushchev's reform in Soviet Russia

• 成果类型: Article
• 署名作者: Markevich, Andrei; Zhuravskaya, Ekaterina
• 署名单位: New Economic School; University of Warwick; Paris School of Economics
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2011.06.003
• 发表日期: 2011
• 页码: 1550-1560
• 关键词: M-form hierarchy; Yardstick competition; Soviet economy; diversification

摘要

We test the premise of the theoretical literature that M-form political hierarchies are effective in creating yardstick competition between regional divisions only when those divisions have sufficiently diversified or similar industrial composition. The reason for this is that the competition among poorly diversified interrelated divisions creates incentives for regional leaders to pursue policies that inhibit industrial growth in neighboring regions in order to make their own region look better from the point of view of the center. We use a unique episode in Soviet history, when a traditional Soviet unitary-form (U-form) hierarchy was replaced by a multidivisional-form (M-form) organization, namely, Khrushchev's Sovnarkhoz reform. First, we demonstrate that during this reform regional leaders were subjected to relative performance evaluation, which created incentives to generate industrial growth. Second, we show that these career concerns resulted in higher growth in regions with sufficiently diversified and, therefore, self-contained economies, and lower growth in highly specialized regions. (C) 2011 Elsevier B.V. All rights reserved.