Explaining Differences in Public Sector Efficiency: Evidence from Russia's Regions

Summary Using the case of Russia's regions, this paper extends the literature on public sector efficiency in three directions: an attempt to better understand differences in public sector efficiency through the study of subnational governments in one country; the first examination of public sector efficiency of subnational governments in emerging markets; and the first study of public sector efficiency in Russia. Three types of scores of public sector performance and efficiency indicate substantial differences across regions. An econometric examination suggests that they are largely explained by per capita income, the share of federal transfers in subnational government revenue, quality of governance and democratic control, and the level of spending.