Russian Governors and Public Procurement Contract Allocation

This paper analyses the impact of governors tenure and his/her local ties on restriction of competition in the allocation of public procurement contracts. Basing on existing literature, we proposed that (1) tenure impact on competition in public procurement is nonlinear and (2) it depends on the governors pre-existing work experience in the region before he/she was elected/appointed. To test these hypotheses we employ contract-level data for the whole population of public contracts on road constructions in Russian regions during 2011-2014, and governors biographical information. The analysis showed that during the first two terms of a new governor in office, the procurement competition increases and thenstarts to decrease. Such a non-linear effect is especially prominent for governors-outsiders - the ones without pre-existing local ties. At the same time, this effect is not observable for the governors who came from the regional elite. Moreover, previous work experience in the region leads to a higher procurement competition on average. We also showed that restriction of competition for governors-outsiders could not be explained by the increase of contract execution quality: execution delays the increase linearly and the probability of execution terminating is not decreasing with the increase of the governors tenure.