Abstract

This study scrutinizes the problems which involve the social and economic development of a specific Russian region, the Republic of Dagestan. Being a miniature Russia in terms of its multi-ethnic composition, this republic is the litmus test of the trends in which social and political contradictions are most pronounced. Peculiar features of the capitalism development in the region with their roots in the environmental conditions and historical background, linked mainly to the collectivist means of production in the agricultural sector, afford ground for the liberal researchers, who are concerned about the transitional capitalist business pattern, to declare the Dagestani economy to be entirely informal and shadow. By adhering to this liberal myth, the Russian statistics neglect the facts and structure the total monetary incomes of the republic with the share of other incomes of 50% and even 60% in some cases. The authors of this study come to the conclusion, that the Dagestan shadow economy is yet another scientific myth which does not receive factual evidence and that all the incomes and expenditures are legitimate and are approximately comparable to each other. This conclusion is based on the analysis undertaken by the RANEPA researchers who claim to prove that Dagestan is surfeited with the shadow economy and the quantitative and qualitative analysis made by the regional statistics, submitted by the Federal and Territorial State Statistics Service. The authors also state that there are no illegal revenues nor capitals that exceed expenditures significantly or involve “illegal intrepreneurship” and “extra-legal right” operation. In the second part of the study the authors carry out the analysis of statistical data and make up study findings and general recommendations.

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