This paper investigates the causal relationship between corruption and fixed capital investment in Russian regions. The panel data on corruption allow to control for unobserved heterogeneity with fixed effects estimation. We address the problem of endogeneity by introducing novel instrumental variables for corruption: the presence of free press and violations of journalists' rights. Our main result is the strong negative effect of corruption on aggregate investment in fixed capital. Disaggregating investment by ownership, we find that corruption decreases private investment, but not investment made by state-owned companies. The effect is larger for companies with foreign ownership. We also observe a strong negative relationship between regional import of capital goods and corruption.

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This article investigates the determinants and consequences of manipulating COVID-19 statistics in an authoritarian federation using the Russian case. It abandons the interpretation of the authoritarian regime as a unitary actor and acknowledges the need to account for a complex interaction of various bureaucratic and political players to understand the spread and the logic of manipulation. Our estimation strategy takes advantage of a natural experiment where the onset of the pandemic adjourned the national referendum enabling new presidential terms for Putin. To implement the rescheduled referendum, Putin needed sub-national elites to manufacture favourable COVID-19 statistics to convince the public that the pandemic was under control. While virtually all regions engaged in data manipulation, there was a substantial variation in the degree of misreporting. A third of this variation can be explained by an asynchronous schedule of regional governors’ elections, winning which depends almost exclusively on support from the federal authorities.

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