Title: Essays in political economy
Description: This dissertation consists of three essays. The first two essays examine the incentives of public officials. The first analyses the way the difference in incentives between appointed bureaucrats and elected politicians affects public policies they pursue. The second essay examines monetary incentives of the senior bureaucrats. The third essay investigates the effect of mass media on the voting behavior of citizens. The first essay compares the policies of elected and appointed public officials with regard to public employment. I argue that elected politicians are more likely to use patronage jobs to achieve personal political goals than appointed bureaucrats. Results of non-parametric estimation using panel data on local governments in the U.S. confirm this claim. The number of full-time public employees is significantly higher in local governments headed by elected chief executives. For part-time employees, who are less likely to be hired for patronage reasons, the difference is much smaller or nonexistent. In addition, privatization of public service provision leads to a decrease in public employment only in communities with appointed chief executives.

Traditionally, bureaucrats are viewed as a stereotypical example of employees with flat pay schedules and low-powered incentive schemes. The second essay challenges this view by providing evidence that wages of a particular group of senior bureaucrats--city managers--are tightly connected to their performance. I show that salaries of city managers are strongly linked to city growth. Additional tests indicate that these results reflect reward for performance, rather than rent extraction. This evidence demonstrates that at least for some bureaucrats there is a strong association between performance and compensation. Competition among local governments is likely to be the main force that sustains high-powered incentives for city managers. How do media affect voting behavior? What difference an independent media outlet can make in a country with state-controlled media? The third essay addresses these questions using exogenous variation in the availability of the signal of NTV, the only independent from the government national TV channel in Russia during the 1999 parliamentary elections. We look at electoral outcomes both at aggregate and individual level. We find that the presence of an independent source of political news on TV decreased the vote for the main pro-government party by 2.5 percentage points and increased the combined vote for major opposition parties by 2.1 percentage points. In individual level data, we find significant effect of watching NTV on voters' choice even controlling for respondents' voting intentions just a month before the elections. Placebo regressions for 1995 and 2003 elections suggest that the effects are not driven by unobserved heterogeneity between municipalities with and without NTV coverage.