The Political Economy of Regional Policy Formation: the Case of Russian Agricultural Subsidies

Thomas Herzfeld (IAMO)
Siranush Ghukasyan (IAMO)

Abstract: This manuscript contributes towards the discussion about the central and local governments’ strategies to retain office in a federal setting using the tools of redistribution. Rural constituencies represent an important group of potential voters, especially in transition autocratic regimes like Russia. We examine whether different governmental tiers in Russia target core or swing voters by redistributing agricultural subsidies from the federal and regional budgets. Using a unique panel dataset of agricultural subsidies in Russia (2008-2015), we find that both federal and regional governments target swing voters. In doing so they explicitly consider the relationship between the federal and regional governments, the level of local business integration in regional parliaments and regional revenue generating capacity. Large agricultural business plays a major role in mobilizing rural constituents and is explicitly targeted by different tiers of the government in subsidies distribution. This distribution scheme ensures federal government’s central role in the politics of a competitive autocracy.