Title

Bureaucratic behavior modeled by reduced-rank regression: The case of expenditures from the Soviet state budget

Document Type

Article

Date of Original Version

1-1-1998

Abstract

A bureaucratic hierarchy compresses information flowing upward and disaggregates directives passing downward, thus making itself amenable to modeling by reduced-rank regression. Applying this technique to the Soviet government, we find that about eight latent variables are required to characterize the mapping of predetermined variables into a vector of budgetary expenditures. The latent variables can be interpreted as targets for expenditures in high-priority sectors.

Publication Title

Journal of Economic Behavior and Organization

Volume

34

Issue

1

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