The price of nationalism: Evidence from the Soviet Union

This paper investigates the effect of implicit subsidies from the Russian Republic to other republics within the former Soviet Union on voting behavior in the All-Union Referendum of March 1991. These subsidies comprised the difference between interrepublic trade balances at domestic and world prices. A model of voting behavior incorporating effects of ethnic composition and subsidies on voting yields the estimating equation. Regression results suggest voters are influenced more by economics (subsidies) than by politics (ethnicity), although ethnicity was an important determinant of republican cooperation with Soviet authorities. Analysis of estimation results suggests the level of implicit subsidies required to increase support for the Soviet regime from 60% to 75% would have equaled 10% of the Russian republic's GDP.