Patron’s largess and regional borrowing under authoritarian rule

Abstract

Patrons in authoritarian governance systems are expected to spread the state’s largess selectively, channeling the most rewards within their client networks. This empirical study evaluates whether the congruence between regional leadership and the leadership at the federal level in the Russian Federation influences the distribution of regional borrowing. The findings show that one of the distribution channels of largess to the regions is through budget credits, a form of heavily subsidized long-term loans that the Kremlin controls. Due to a symbiotic nature of the linkage between the central state and regional clients in this patronage system, largess accrues to the regions that offer greater support to the party of power in their regional legislatures. However, this linkage is present only in relatively more contested regions of the federation and not in the regions where the party of power holds a majority of legislative seats. Empirical results remain significant even when regional wealth and fiscal need variables are considered.