Political Rents, Promotion Incentives, and Support for a Non-Democratic Regime

agreement with national trends with the exception of 1958, when the two largest republics in
the sample, Belarus and Uzbekistan, underwent territorial reorganization unmatched in its
scale in the rest of the country.

IV. Empirical implementation and estimation results

4.1. Empirical specification

Empirical studies (Martin Weitzman (1970), William Easterly and Stanley Fisher
(1995)) show that the Soviet economic growth is consistent with a CES production function
with the elasticity of substitution of 0.4.²⁸ Therefore the generic specification (19) can be
replaced with:

ε

(27)          f (N ) = [K ^ρ + ((1 + aN_a )L)^ρ ]ʌ, ε ≤ 1, ρ < 0.

Accordingly:

(28)          X ( N, ) = εaNP[ (K / L )^ρ + (1 + N )^ρ ]^-1.

Since reasonable numbers of activists are small (Na ~ 10^-2), (28) can be approximated
for negative values of ρ (less than unitary elasticity) and with:

(29)          X(N_a ) = akNα (K / L)^β,    where k > 0, 0 < α < 1, 0 < β < 1.²⁹

²⁸ Although some authors (see Padma Desai, 1987) find that Soviet postwar economic growth is
consistent with unitary elasticity of substitution, elasticity below one seems to be typical for
developing economies. It has been identified, for example, for the South Korean economy (Ky-hyang
Yuhn, 1992) and many others. John Duffy and Chris Papageorgiou (2000) find that less developed
economies, as a group, are characterized by less-than-unitary elasticity of substitution.

²⁹ Note that α and β here are only to parameterize the approximation of X(Na) and bear no meaningful
relationship to ρ and other parameters of (28). Estimation of the latter is beyond the scope of the
present research.

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