Owning Russia: The Struggle over Factories, Farms, and Power by Andrew Barnes (review)

Abstract

772 SEER, 86, 4, OCTOBER 2008 financial flows do not reflect the real flow of resources and economic legisla tion has litde effect on economic activity or even perverse effects. She con cludes on an understated note: 'Despite the fact that advances have been made in these areas since the 1990s, it is clear that the spiritof accountability and disclosure inRussia is far from sufficient' (p. 162). The famed tolkach of the Red Director, according to Ledeneva, has become a specialist who ' bridges the gap between the formal rules and the informalworkings of the system' (p. 178). She cites the fact that, in 1998, 2,500 banks and 72,000 commercial organizations had their own security services. In other countries, such services might protect clients in market transactions, but in contemporary Russia they are associated with debt collection and other activities resulting from the high levels of personal risk and corruption. Ledeneva has written an authoritative account of how contemporary Russia works. It is essential reading for those contemplating doing business in Russia and for scholars of theRussian transition. She shows a strong current of continuity from the Soviet period, which is only natural because contem porary Russia is run by the same persons who ran it in the Soviet period. The research was likely done before the takeover of the economy's assets by Putin's allies. But the forces she describes appear to apply to his regime as well. The author makes a strong point that what we observe in contemporary Russia owes much to the Soviet legacy. She clearly points to the unsatisfac toryworking of formal institutionsand their limited effecton the real flow of resources. What ismissing is a feel for the long run equilibrium. Is what she describes forRussia the long-run outcome or are there forces thatwill push Russian political and business institutions in thedirection ofmore formal rules and transparency? There are some signs of flux such as the sharp reduction in barter after the 1998 crisis. A second question iswhether contemporary Russia differs in significantways from other countries that operate at a similar level of corruption? If a researcher, such as Ledeneva, were to conduct blind interviews with businessmen and politicians from five countries that rank the same as Russia on corruption indexes, would she be able to distinguish Russian practices from the rest?This would be the ultimate testof the role of initial conditions on contemporary Russia. Our profession produces too few works of this type. It takes considerable skill, tact and interpretative powers to draw general conclusions from unstruc tured interviews.Moreover, the work has high costs in terms of time and effort.Ledeneva is to be lauded for thisproductive effort. Department of Economics,Universityof Houston, TX Paul R. Gregory andHoover Institution, Stanford University, CA Barnes, Andrew. Owning Russia: The StruggleOver Factories,Farms, and Power. Cornell University Press, Ithaca, NY and London, 2006. xvii + 273 pp. Tables. Notes. Bibliography. Index. $35.00: ?19.95. Most of the social science literature on the transformation of the state social ist systemshas been framed in terms of the 'transition to democracy and the market'. Proponents of transformation adopt the mantle of enlightened reviews 773 reformers, and dub their opponents as die-hard 'hardliners'. Andrew Barnes is critical of these divisions and suggests that at the core of developments in post-Soviet Russia lies a struggle for property. This conflict has shaped the contours of federal and regional politics as well as the relationship between the state and the major economic players. Rather than focusing on 'optimists' for, or 'pessimists' against reform, the author suggests that we consider actors' access to property. In this context the book outlines in considerable detail the different stages of property seizure and transfer: 'spontaneous' privatization, mass voucher privatization, loans for shares and other sales and subsequent transfers. It details quite well the changing legal basis of ownership. The book has the advantage of considering the quest for assets both in industry and agriculture. It also defines the major players in the process: these were repre sented by workers and the public, the oligarchs and other economic groups, the state in both itsfederal and local forms, and managerial executives in the...