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From well to welfare: social spending in mineral-rich post-Soviet states

Abstract

Why do some autocrats redistribute resource rents through high welfare spending, while others do not? Conventional wisdom suggests that authoritarian leaders unconstrained by institutions and with unlimited access to resource wealth would siphon off these funds for themselves and rent-seeking elites at the expense of delivering goods to citizens. Yet, welfare spending levels among the world's petroleum-rich authoritarian and hybrid regimes indicate that some rulers are more inclined than others to "share the loot" with the larger citizenry.

This dissertation provides a theory of redistributive social spending in mineral-rich authoritarian regimes, using the cases of Russia, Kazakhstan and Azerbaijan. I analyze health, education and social security spending in each country from 2000-present, leveraging variation across cases as well as within each case over time. In Azerbaijan under Heidar Aliev (1995-2003) and Ilham Aliev (2003-present), there is little evidence of desire on the part of the government to engage in redistribution. Welfare expenditures have remained consistently low as a percentage of GDP and decreased drastically over time as a percentage of total government spending. By contrast, welfare expenditures in Russia under Vladimir Putin (2000-present) have increased substantially since the early 2000s, driven largely by new social policy initiatives aimed at increasing pensions, salaries for health and education workers, and expanding categories for direct cash transfers and benefits to citizens. Finally, Kazakhstan under Nursultan Nazarbaev (1991-present) occupies a middle position between these two extremes.

I find that variation in social spending is explained by differences in elite cohesion. Different degrees of unity and conflict among political and economic elites affect the autocrat's sense of security about his position. When elites are divided, the level of threat to the autocrat is high. In order to counterbalance this threat and guarantee security, the autocrat buys the loyalty of allies in society through high social spending. The public becomes an important beneficiary of the redistribution of resource rents, and provides the autocrat with legitimate support. The autocrat then leverages this societal allegiance to deter threats by potential opponents. Conversely, when the elite is unified, the level of threat to the autocrat is low. In the absence of potential challenges from within the elite, the autocrat does not depend on societal allies to ensure the continued stability of his position, so welfare spending remains low. Due to the broad empirical and theoretical significance of redistribution under authoritarianism, this explanatory approach makes both substantive and theoretical contributions to the study of authoritarianism and the "resource curse," and is applicable to mineral-rich non-democratic regimes in the Middle East, North and sub-Saharan Africa and Latin America.

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