Roving Bandits in Action: Outside Option and Governmental Predation in Autocracies

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe paper investigates the influence of outside options on the predatory behavior of autocrats. An outside option is referred to as the opportunity of an incumbent ruler to continue his career outside his current territory of control. The paper uses data on the effectiveness of tax collection and the repressiveness of tax jurisprudence for Russian regions in 2007-2009 and finds that regions ruled by governors with substantial outside options are characterized by more repressive behavior of tax authorities. However, surprisingly, the same tax authorities collect less additional revenues for the public budget. It conjectures that the presence of an outside option induces autocrats to behave like 'roving bandits': they use tax audits to establish control over regional companies, but exploit this control to extract private rents rather than revenues for the regional budget used for public goods provision.

Strategic Tax Collection and Fiscal Decentralization: The Case of Russia

“…In fact, we show that main changes in the behaviour of tax administrators come from the informal power shifts, even before the formal institutions have changed. This result is confirmed by other studies of the behaviour of Russian tax authorities: Libman et al (2012) show that in the late 2000s changes of appointment practices and personnel composition of Russian governors allowed them to re-establish close ties to tax collectors.…”

“…This result is confirmed by other studies of the behaviour of Russian tax authorities: Libman et al . () show that in the late 2000s changes of appointment practices and personnel composition of Russian governors allowed them to re‐establish close ties to tax collectors.…”

Economic, structural and socio‐psychological determinants of protests in Russia during 2011–2012

“…Secondly, in the stylized facts, we have highlighted resource curse and rent-seeking. Indeed, as in Libman et al (2012), the assigned governors can be compared to 'roving bandits'. Whereas the oil dummy was not significant, the ratio of the governor's family income to the average family income was a robust and positive determinant of protests.…”

“…Libman et al . , p. 529) have compared Russian governors with ‘roving bandits’. In our specifications we also use the relationship of the governor's family income to average family income as a proxy for income gaps and social tension or grievance: a Gini coefficient is a distant macroeconomic measure published post factum and with a substantial delay, whereas the governor's income is publicly available once the related tax declaration is submitted and thus the poor can be informed about the income of the rich.…”

Testosterone and Repression in Non‐Democracies: Evidence from a Sample of Russian Governors

“…11 Similarly, governors appear to have enough influence on the 10 For two other types of repressiveness, these 'regional sentiments' could be less important, because the decisions of the courts are more important for governors' careers and hence are under stricter control of the governors. 11 Libman et al (2012) show that federal connections are positively correlated with repressiveness in tax matters and interpret it as evidence of greater rent-seeking of governors, who have previously worked in the federal administration and are more likely to behave as 'roving bandits' without any strong link to the region. However, in their paper tax repressiveness is but one of a three-element strategy, which is used by governors to extract rents: governors with federal connections also increase the intensity of field audits of companies, but at the same time the budget revenue from tax prosecution does not increase and even goes down (since the money is diverted to the private pockets of the governor).…”