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Bureaucracy and growth: Evidence from Russian regions


TERRA ECONOMICUS, Vol. 24, No 3

Citation: Borshchevskiy G.A. (2026). Bureaucracy and growth: Evidence from Russian regions. Terra Economicus 24(3), 105–122. DOI: 10.18522/2073-6606-2026-24-3-105-122

This article proposes a model for assessing the economic impact of state bureaucracy at the regional level. We examine elements of the bureaucracy’s production function, such as staffing and compensation of public servants (federal civil servants of territorial divisions of federal executive bodies, and civil servants of state authorities of the regions of the Russian Federation, and municipal employees of local governments) across all regions for the period from 2007 to 2022. Average wages in the economy with public servants salaries fluctuate cyclically and consistently. Wages in the public service have converged with the national average over time. The number of regions where public servants’ salaries are below the regional average has increased, indicating a decline in the competitiveness of the public service in labor markets. The share of public servants does not exceed 3 per cent of the total employed in the economy. The total number of public servants has decreased by 24 per cent over 15 years. A decrease in average staffing has been noted at all three levels of public administration. The relationship between public servant salaries and per capita GRP was assessed using a panel regression with fixed effects. Increases in public servant salaries have a positive impact on per capita GRP, especially in the recent period. Spatial effects are unevenly distributed. From a New Public Management perspective, it is concluded that Russian bureaucracy at the regional level is a factor in economic growth, producing more public goods while employing fewer factors. The increase in bureaucratic productivity against the backdrop of an increase in per capita GRP suggests some increase in the effectiveness of the bureaucracy during the period under study.

Keywords: bureaucracy; economic growth; civil service; gross regional product; public service; New Public Management
JEL codes: D73; H75; M12


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Publisher: Southern Federal University
ISSN: 2073-6606












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