nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2019‒05‒20
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Central Asia Oil and Gas Industry - The External Powers’ Energy Interests in Kazakhstan, Turkmenistan and Uzbekistan By Raimondi, Pier Paolo
  2. Sanctions and Public Opinion: The Case of the Russia-Ukraine Gas Disputes By William Seitz; Alberto Zazzaro
  3. Decentralization of Firms in a Country with Weak Institutions: Evidence from Russia By Irina Levina
  4. Extra Votes to Signal Loyalty: Regional Political Cycles and National Elections in Russia By Oleg Sidorkin; Dmitriy Vorobyev
  5. Empirical challenges comparing inequality across countries: The case of middle-income countries from the LIS database By Checchi Daniele; Cupak Andrej; Munzi Teresa; Gornick Janet
  6. Interdependence of sectors of economic activities for world countries from the reduced Google matrix analysis of WTO data By C\'elestin Coquid\'e; Jos\'e Lages; Dima L. Shepelyansky

  1. By: Raimondi, Pier Paolo
    Abstract: After the Soviet breakup, Central Asia has gained importance for several States because of its geographical location and abundance of hydrocarbon reserves. These hydrocarbon reserves are located mainly in three countries: Kazakhstan, Turkmenistan and Uzbekistan. Each of them has taken different path regarding its foreign policy and the regulation of investments and participation of external companies and States in its energy sector. Through the development, production and export of their oil and gas reserves, they have pursued a ‘multi-vector’ policy, consolidating differently their relations with other countries. The main States involved – at different levels and for different reasons – in the oil and gas sector of the Central Asian countries are: Russia, China, United States, European countries, Iran, India and Turkey. Among these players, Russia considers Central Asia still part of its sphere of influence for historical reasons, while it has to deal an increasing presence of Beijing. The Western countries has gained influence particularly in Kazakhstan, but they have no political leverage in Turkmenistan. This working paper provides an overview of the current situation of external players’ interests in the oil and gas industry of Kazakhstan, Turkmenistan and Uzbekistan. The working paper is structured into four different sections. In the first section, the paper gives an overview of the main interests and pillars of external involvement in Central Asia as a region. The other three sections are devoted to provide separately the current status of energy relations between each Central Asian country and external players, starting from the closest countries (Russia and China) to the regional ones (Iran, Turkey and India) until non-regional countries (United States and European countries). During these analysis, investments in the oil and gas sector as well as energy export routes and volumes are highlighted in order to understand the current situation of the energy relations. At the end of each country section, the main trends and interests of the countries in the regional oil and gas sector are outlined.
    Keywords: Resource /Energy Economics and Policy
    Date: 2019–05–15
  2. By: William Seitz (Independent Researcher); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: Economic sanctions usually fail, sometimes even provoking the opposite of the intended outcome. Why are sanctions so often ineffective? One prominent view is that sanctions generate popular support for the targeted government and its policies; an outcome referred to as the rally-around-the-flag effect. We quantify this effect in the context of a major trade dispute between Ukraine and the Russian Federation, which led to a cut in gas exports to Ukraine and a sharp increase of gas prices. Using individual data on political and economic preferences before and after the trade dispute and exploiting the cross section heterogeneity in the individual exposure to the price shock—measured by the connection to a centralized gas/heating system—we find that people more directly affected by the increase of gas prices were significantly more likely to change their opinions in support of Western-style political and economic systems preferred by the incumbent government, consistent with a rally-around-the-flag effect.
    Keywords: Sanctions, Gas Dispute, Russia, Ukraine, Rally-Around-the-Flag
    JEL: F13 F51
    Date: 2019–05–09
  3. By: Irina Levina (Institute for Industrial and Market Studies, National Research University Higher School of Economics)
    Abstract: Can decentralization of firms be successful in an environment with weak institutions? Decentralization can do a great job for improving firms’ efficiency and competitiveness by creating opportunities for quicker and more competent decision-making and enhancing motivation of employees. However, decentralization is associated with a substantial increase in agency risk, which is particularly important for firms that operate under weak institutions. Hence, the popular belief is that in countries with weak institutions, firms are unable to successfully decentralize. In this paper, we study evidence from Russian firms to challenge this belief. Following anecdotal evidence and trends observed in the data, we introduce the notions of real decentralization for firms that decentralize decision-making to competitively hired professionals and cautious decentralization for firms that decentralize to people hired through connections. We demonstrate that really decentralized firms are, on average, significantly more likely to invest even in Russian weak institutional conditions. We also show that the gap in investment between really decentralized and other firms declines as corruption grows. Empirical research presented in the paper implies that there still can be significant room for decentralization even in an environment with weak institutions, such as that of Russia. However, as the role of non-market factors (such as corruption) in firms’ prosperity increases, the potential value of decentralization for the firms declines.
    Keywords: decentralization, decision-making, investment, institutions, corruption, Russia
    JEL: D02 D22 D23 L2 M2 M51
    Date: 2018–08
  4. By: Oleg Sidorkin (Leibniz-Institute for East and Southeast European Studies, CERGE-EI); Dmitriy Vorobyev
    Abstract: Under the system of appointing regional governors by the president, which existed in Russia between 2005–2012, governors’ loyalty to the central government and particularly their ability to deliver satisfactory results to the ruling party in national-level elections were crucial to their likelihood of being re-appointed for the next term. In this paper, we show that governors, anticipating the relationship between loyalty and re-appointments, attempted to increase their likelihood of being re-appointed by delivering additional votes to the ruling party, and that these attempts were subject to regional political cycles. We argue that delivering satisfactory results may have different importance to a governor depending on the stage of his term at which elections are held. If elections are held close to the expiration of a governor’s current term, the results are likely to be pivotal to his further political career. Exploiting variation in the starting and expiry dates of Russian regional governors’ terms of office, we find that the winning margins for a pro-government party across Russian regions in national-level elections held between 2007–2012 were substantially higher when elections were closer to the expiration of a regional governor’s term. However, for elections held between 1999–2004, when governors were subject to a direct vote by the regional population, no similar effect is found. We then implement several exercises to identify the source of the additional votes for the ruling party and demonstrate that governors, while unlikely using the means of electoral fraud, exerted efforts to stimulate turnout among ruling party supporters.
    Keywords: political cycle, elections, electoral fraud, Russia
    JEL: D72 D73 P26
    Date: 2018–10
  5. By: Checchi Daniele; Cupak Andrej; Munzi Teresa; Gornick Janet
    Abstract: This study presents new empirical results, using microdata from the LIS database, on development patterns in economic inequality for a set of countries that are less covered in the empirical literature, mostly due to the lack of appropriate data.After discussing the main challenges when harmonizing income and consumption microdata from middle-income countries, we focus on Brazil, China, India, Russia, and South Africa, in a comparative perspective, and we compare them with a selection of benchmark middle- and high-income countries. We also run country-level regressions to correlate the inequality measures with selected macroeconomic indicators.
    Keywords: Middle-income countries,Survey data,Economic development,Equality
    Date: 2018
  6. By: C\'elestin Coquid\'e; Jos\'e Lages; Dima L. Shepelyansky
    Abstract: We apply the recently developed reduced Google matrix algorithm for the analysis of the OECD-WTO world network of economic activities. This approach allows to determine interdependences and interactions of economy sectors of several countries, including China, Russia and USA, properly taking into account the influence of all other world countries and their economic activities. Within this analysis we also obtain the sensitivity of economy sectors and EU countries to petroleum activity sector. We show that this approach takes into account multiplicity of network links with economy interactions between countries and activity sectors thus providing more rich information compared to the usual export-import analysis.
    Date: 2019–05

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