Economic Reform In Russia Research Articles

Institutionalism: Theory, Decision-making Basis, Method of Criticism

The author analyzes the state of institutional economics in contemporary Russia. It is characterized by arbitrary confusion of the ideas of «old», «new» and «mathematical» versions of institutionalism which results in logical inconsistency and even eclectics to be observed in the literature. The new and mathematical versions of institutionalism are shown to be based on legal, political and mathematical determinism tightly connected with the so-called «economic approach» (G. Becker). The main attention is paid to the discussion of theoretical and practical potential of the contemporary classical («old») institutionalism. The author focuses on its philosophical grounds and its technological imperative, the institution of science, the method of criticism, the opportunity of using classical institutionalist ideas as the ideology of economic reforms in Russia.

Адаптация бизнеса транснациональных корпораций к российскому контексту: на примере компании "Стора Энсо"

The focus of the paper is on the project model of constant forest use as a business strategy of transnational corporation “Stora Enso”. It was shown how the corporation used the strategic partnership with the Foundation of wild nature in order to build good relations to all the interested parts: local population, state authorities, other companies and scientific society. The paper discloses that the corporation played the role of guide for global rules to the locality: through the certification of forest management and through the spreading its own corporate policy to the branch company. Theoretical analysis is based on the assumptions of institutional isomorphism. The study demonstrates that experience spreading on other companies of this corporation in Russia (mimical isomorphism) faced obstacles sue to the instability of the institutional background of Russian regions during the long term period of economic reforms in Russia.

L'émergence du droit public économique en Russie : un regard comparatif

The emergence of public economic law in Russia: A comparative view The economic reform in Russia has aroused lively discussions about the need for government interventions in the economy. Jurists have limited their actions to defining a legal framework for the prevailing economic theory. Contemporary Russian law in economic matters (khozjajstvennoe pravo) can no longer be considered to be the equivalent of public economic law as it exists in Europe. Questions related to the public regulation of economic activities are scattered through various branches of Russian law. They have not been brought together, not even for teaching purposes. The history and current situation of public economic law in Russia and France are compared.

Fifteen Years of Economic Reform in Russia: What Has Been Achieved? What Remains to Be Done?

The paper provides an overview of the course of economic reform and the performance of the Russian economy since the early 1990s and an analysis of the structural reform challenges ahead. It assesses the contribution of institutional and structural reforms to economic performance over the period, before turning to the question of where further structural reforms could make the biggest contribution to improved performance. Three major conclusions emerge. First, there is still a great deal to be done to strengthen the basic institutions of the market economy. While the Russian authorities have embarked on some impressive – and often technically complex – ‘second-generation’ reforms, many ‘first-generation’ reforms have yet to be completed. Secondly, the central challenges of Russia’s second decade of reform are primarily concerned with reforming state institutions. Thirdly, the pursuit of reforms across a broad front could enable Russia to profit from complementarities that exist among various strands of reform. Quinze ans de reformes economiques en Russie : Qu'a-t-elle acquis ? Que reste-t-il a faire ? L’article donne un apercu du deroulement des reformes economiques et des performances de l’economie russe depuis le debut des annees 90, ainsi qu’une analyse des enjeux des futures reformes structurelles. L’article considere la contribution des reformes institutionnelles et structurelles a la performance economique durant la periode, avant d’examiner dans quels domaines des reformes structurelles additionnelles pourraient avoir la plus grande contribution a l’amelioration de la performance economique. Il en resulte trois conclusions majeures. Premierement, il reste encore beaucoup a faire pour renforcer les institutions de base d’une economie de marche. Bien que les autorites russes aient commence quelques reformes de « seconde generation » qui sont impressionnantes – et souvent techniquement complexes-, il reste un bon nombre de reformes de « premiere generation » a achever. Deuxiemement, les defis centraux de la deuxieme decennie de reformes concernent en premiere ligne la reforme des institutions de l’Etat. Troisiemement, la poursuite des reformes sur un large front permettrait a la Russie de profiter des complementarites existantes entre les differents axes des reformes.

Economists as experts: Overconfidence in theory and practice

Drawing on research in the psychology of judgment and decision making, I argue that individual economists acting as experts in matters of public policy are likely to be victims of significant overconfidence. The case is based on the pervasiveness of the phenomenon, the nature of the task facing economists‐as‐experts, and the character of the institutional constraints under which they operate. Moreover, I argue that economist overconfidence can have dramatic consequences. Finally, I explore how the negative consequences of overconfidence can be mitigated, and how the phenomenon can be reduced or eliminated. As a case study, I discuss the involvement of Western experts in post‐communist Russian economic reforms.

Russia’s Economic Reform Outlook

The author reviews the process of economic reforms in the Russian Federation in 2004-2005 and assesses reform perspectives for the period of 2006-2008. In most of the reform areas Russia is still a long way from the level of OECD countries: outcomes for 2004 demonstrate that during 2003-2004 Russia joined the economies in transition with the slowest pace of reforms. The article analyzes the possibilities and obstacles for continuation of reforms within the next three years. The author concludes that in the mid-term perspective the pace of Russian economic reforms is unlikely to accelerate. There is a close positive connection between the pace of reforms and the rate of economic growth in transition economies; therefore, the slow pace of reforms will contribute to deceleration of economic growth. Consequences of the reform slowdown will become most visible beyond 2008.

Russia and the West: Is there a Values Gap?

For centuries, Russians have wondered if they are a part of ‘Europe’ and Westerners have questioned whether Russians are ‘European’. Since the collapse of the USSR, economic reform in Russia has followed Western models and good relations with the European Union have been high on Russia's foreign policy agenda. However, EU policy is based on an assumption that Russia will adopt European values. This article investigates whether there is a commitment to common values, or whether there are differences that might put the EU–Russian relationship at risk. Comparing the results of a national representative survey conducted in December 2003 and January 2004 with the findings of a 2001 survey and with European responses to Eurobarometer surveys, the authors find that there are consistent and often substantial differences in values between Russians and their counterparts in EU member countries and that the values gap appears to be widening.

Russian Economic Reforms in 1990s

Russian Economic Reforms in 1990s

The Piratization of Russia: Russian Reform Goes Awry by Marshall s> Goldman (review)

REVIEWS 389 Another favouredclue presented may conceal problems.In historicalterms those partiespassed, as itwere, througha funnel constitutedby the Comintern and the Cold War. They entered the funnel from widely disparate starting points and, once emerging from the funnel, they began to diverge again. Herbert Kitschelt, in this work and elsewhere, has built on this idea (though not the funnel image itself). But not even he or not in thisbook develops the full implications of this. One implication concerns the term 'successor party' itself. Except in a very simple and analytically barren sense, the Communist Partyof Bohemia and Moravia is no more a successorof the prewar , and then Cold WarCPCz than today'sGerman Social-Democratic Party is a successorof the SPD of Engels's day. It is the same party (apartfrom the loss of the Slovakelement, which does not affectthis argument)and let not the defenders of the organization thesisgainsay this, since it makes theirpoint. It is history and geopolitics that in fact created two of the three types nationalist-patriotic and pragmatic reform parties that the book derives from a studyof the post-Communist 'succession'period. And it is a sensitivity to history that suggeststhat the label given for the book's third type -leftist retreat, embracing the Communist Party of Bohemia and Moravia and the German Party of Democratic Socialism is a perverse and dangerous misnomer. What is important is that they started together in a category differentfrom the others, that the Comintern and the Cold Warbound them together with weird congeries of sections/parties with which they had little in common, and that they have now picked up the trail from which they were diverted,but in a world that has, of course, changed. SPIRE,Keele University MICHAEL WALLER Goldman, Marshall. T7he Piratizationof Russia: RussianReformGoesAwgy. Routledge, London and New York, 2003. x + 289 pp. Tables. Figures. Notes. Bibliography.Index. /IJ4.i99 (paperback). THE question of how far oligarchic power has been established over the Russian economy and political system, and why, is the main theme of this book. Marshall Goldman argues that the power of oligarchs and (sometimes associated)criminalgroupsisboth extensiveand hashad a formativeinfluence on the outcome of Russian economic and political reform. These reform outcomes were the product, Goldman contends, of a mixture of economic 'culture'and bad policy choices. The economic 'culture'of Russia created by its historical experience as a late modernizer under the Tsars and as an antimarketmodernizerunder the CPSU was a problem thatwas inescapable,but sensitivepolicies might have ameliorateditsworsteffects.However, Goldman argues,suchpolicieswere not developed, let alone implemented. Inparticular, Goldman argues, it was the policies of privatization in both its firstround of voucher and insiderprivatizationand in its second round of 'sharesfor loans' that were responsible for the deformations of Russia's political economy. In support of his argument, Goldman provides an economic history of Russia from the nineteenth century to the present, records the failures of economic reform in terms of the transitional recession that accompanied it, reviews 390 SEER, 82, 2, 2004 privatizationpolicies and the structuresof ownership and corporate governance thattheyproduced, provides detailsoftheoriginsandactivities of the oligarchs,boththosethatemergedfromwithinthe old nomenklatura and thenewcomers, looksattheinfluence oforganized crimeoneconomicactivity, recountsofficialconnivancewith, and participation in, illegal,or at least dubiouseconomicactivity,and sketchesout alternativepoliciesto those followedinRussia. The empiricalpicturethat Goldmanpaintsis one thatmostpeoplewill knowat leastin outline:marketization hasbeendeformed; wealthhasbeen concentrated in a fewhandswhilstgeneralpovertyhasrisen;corruption and the misappropriation of state assetshave been rife;the preconditions for development whethereconomicorpoliticalhavebeenerodedasconfidence in the economicfuturehascollapsed.Goldman's accountof thesefailingsis richin detailandanecdote.Althoughhisnarrative is similarto manyof the journalistic booksthathavebeenpublished overthelastfewyearsaboutthe 'saleof thecentury'or theriseof themafiya, Goldmanhasa greatersenseof contextandismorejudiciousinevaluating thenatureandextentofeconomic collapse.In particular,the chapterson the currentstate of the Russian economy,who theoligarchsareandwheretheirwealthhascomefrom,are excellentintroductions tothesesubjects. Whatis lesssatisfying is the explanation forreformsgoing'awry'andthe implicitidea thatpervadesthe bookthat Russiahas becomestuckwith a dysfunctional formofpoliticaleconomythatwillreplicate itselfbecauseofthe culture/badpolicymix. Goldmanis too determined to critiquetheformof privatization in Russiato fullyallowforotherfactorsinfluencing change.He presents reform as being more or less synonymouswith privatization. Althoughcriticalofthe'Washington consensus' reform package,discussion of otheraspectsof the Washington reformmodelsuchas priceliberalization, currencystabilization, and commercialization, areperfunctory and are not accordedmuchexplanatory role.The rolethatGoldmanassignsto 'culture' isalsolessthansatisfactory sinceitbecomessomething ofa catch-all category describing atdifferent timesthingsthatarequitediverse: attitudes andvalues, incentivestructures, socialpracticesand politicalinstitutions. Yet,each of thesehasplayeddifferentrolesat varioustimesoverthe lasttwentyyears, sometimespositiveandsometimesnegative.Theseproblemsmakethe idea that Russiais stuckin a half-wayhousebetweenthe past...

Russia: Political and Institutional Determinants of Economic Reforms

The purpose of this study is to analyze the course, determinants and political economy of economic reforms in Russia conducted in the period 1985-2003. The year 1985 can be considered an important turning point in Soviet/Russian history, marked as it was by the election of Mikhail Gorbachev to the position of General Secretary of the Communist Party of Soviet Union (CPSU) and (de facto) leader of the USSR. This nomination brought an end to two decades of political consolidation of the communist regime connected with the name of General Secretary Leonid Brezhnev and his short living successors (Yurii Andropov and Konstantin Chernenko), often referred to ex post as 'the stagnation period' (vremya zastoya). Gorbachev initiated a series of important political and (to a lesser extent) economic reforms, which led eventually to the collapse of the communist regime and the disintegration of the Soviet empire in 1991. Thus, 1991 must be seen as another dramatic turning point in Russia's contemporary history. From the end of 1991 onwards political and economic reforms have been carried out by the new Russian state that emerged after the disintegration of the USSR. This paper aims to explain the political and institutional determinants of economic reforms in the Russian Federation. It has been carried out under the Global Research Project on 'Understanding Reforms' organized and financed by the Global Development Network (GDN)1 as one of 30 country studies covering a broad set of developing and transition economies. It presents the project's intermediate results and will be the subject of further discussion as well as analytical and editorial work in the near future. The case of Russia is very important and interesting from the point of view of GRP 'Understanding Reforms' goals and agenda, for many reasons. First, all transitions from communist regimes and centrally-planned economies to democratic capitalism represent a much more complex, complicated and difficult reform experience than policy reforms observed in developing countries, especially when they relate to just one or a few specific policy areas. Thus, learning the transition experience, particularly in its early phase, can provide an extremely valuable empirical input to 'understanding reform' and provide answers to the project's key questions: 'why reform?', 'what reform?', and 'how well did the reform perform?'

From current-day Russia to Porfirio’s Mexico

Good economic institutions promote prosperity. Yet bad institutions can persist because they induce patterns of distribution that benefit certain groups, which accordingly have a vested interest in the status quo. InWithout a Map: Political Tactics and Economic Reform in Russia, Andrei Shleifer and Daniel Treisman show how politicians in Russia used a specific kind of deal, a mixture of expropriation and co-optation, to destroy these vested interests in the transition to a market economy. In this essay I show that there are close analogies between institutional change in contemporary Russia, and that which occurred in nineteenth-century Latin America, particularly in Mexico during thePorfiriato. After developing the analogy I draw some conclusions from the Mexican experience for the long-run implications of Shleifer-Treisman deals. The good news is that sustained economic growth is possible with the institutions that Russia seems to have developed. The bad news is that these may lead to extreme social conflict and ultimately revolution. I argue that there are two mitigating factors in Russia that provide grounds for optimism that revolution may be avoided. First, Russia is a democracy; second, the role of foreign investment is limited.

The Logic of Economic Reform in Russia by Jerry F. s> Hough (review)

REVIEWS 775 differentpasts, including the half-century of rule by Moscow, and different futurestoo. The problem is that an explicit theoretical model is really not an optional extra in analysing processes of social change, and the principal authors disavow any claim to 'theory testing' (the inverted commas appear in the original).But there is in fact a rudimentarytheory of state-societyrelationsat work here, smuggled in piecemeal, and expressed in the authentic voice of Parsonian functionalism. They are prone to statements like the following, which gives a good sense of the tone and argument of the book as a whole: 'Popularly perceived legitimacy -that the political system is serving the needs of the population is an importantcomponent of political stabilityin any country'(p. I89). The claim is untrue,even ifrestrictedto the specialcase of multi-partyparliamentarysystems.Western democracies (as the principal authors are inclined to acknowledge from time to time) are riddled with apathy and anomie. This study in effect diagnoses a severe case of the same ailment in post-communist states, but offers few clues about how we are to relate the survey findings to the hopes, fears and expectations of the people who answeredthe questions.Fromthat standpoint,the book provokesa sense of disappointmentat an opportunitymissedto listen to realvoices at a time of momentous changes. School ofSocialSciences LESLIE BENSON University College Northampton Hough, Jerry F. T1he LogicofEconomic Reform in Russia.BrookingsInstitution Press, Washington, D.C., 2001. xvii + 3I8 pp. Tables. Notes. Index. $I8.95 (paperback). LIKE theRussianeconomy, veteranSovietologistsface aproblemofrestructuring . Can they adapt their entrenched capacities to the post-Soviet situation? Jerry Hough's book showshow difficultthey areliable to findit. His firstfour chaptersoffera personal overview of Russia'sinitialeffortsat reshaping its economic system, beginning with Gorbachev's policies in the terminal years of the USSR, but focusing mainly on post-IggI measures in the Russian Federation. The emphasis is heavily on the first two years (199 -93) of the Yeltsinregime, with its newly liberalized markets,financial instabilitiesand helter-skelterprivatization. In chapterfive, Hough turnsto thepolitical and electoralvicissitudeswhich accompanied these early reform struggles.He gives a vivid account of Boris Yeltsin'sremarkablehandlingof thepoliticaltrianglecomprisinghis executive apparatus;the legislature (Congress of People's Deputies and its derivative, the Supreme Soviet) which increasinglychallenged him and his policies; and public opinion at large. This phase culminated in autumn I993 with the forceddissolutionof the legislatureand the formulationof a freshconstitution. The new set-up downgraded the legislature and made it bicameral, with only the lower house (theDuma) directlyelected by the population. The first Duma election, skilfullycalled by Yeltsinin late 1993 so as to pre-empt any possible attemptsto rejectthe constitution,gave a sizeable majorityto parties 776 SEER, 8o, 4, 2002 ostensibly hostile to the previous two years' policies. There followed a less turbulentre-runof the same triangulardramaasbefore, but with the question of the Presidentialsuccession looming larger than the I995 and i999 Duma elections. The politics of some of the economic debates of these later years form the topic of chapterssix and seven. A concluding eighth chapter reverts to more general reflectionson 'Institutions,MarketReform and Democracy' in today'sRussia. Hough applies his expertise as a political scientist both to grass-roots research on Russian public opinion and to analysis of Yeltsin'spresidential performance, especially his re-election of I996. The author considers and rejectsthe possibilityof decisive voting frauds.He stressesYeltsin'spopulism and patronage. He understates, I suspect, the financial and administrative skulduggery which denied the opposition (primarily Gennady Zyuganov) equalityof campaign exposure. On the otherhand, he arguablygivestoo little weight to the psychological advantage of Presidential incumbency. To vote for an opposition partyin the Duma but for the Presidentin officelookslike a natural'splitticket'in the Russiancontext. The serious shortcomings of the book, however, are in the sphere of economics. It is here that Hough the Sovietologist, so far from having restructured,is cocooned in preconceptions sustainedby an inadequategrasp of basicprinciples. The key preconception is that fundamentally nothing (or very little) has changed as regards the mechanism of economic control. The Russian economy remains state-directed. Large industrial corporations are 'quasiministerialholdings '.Gosplanhasbeen re-labelledthe Ministryof Economics. Subsidieshave alteredonly in form, not in substance. Close behind follows the related notion that Russia'seconomic reformhas above all decimated fixed investments in order to subsidize a raft...

The logic of economic reform in Russia

The logic of economic reform in Russia

The myth of equilibrium: winner power, fiscal crisis and Russian economic reform

It has become common to describe Russia as a state that has only achieved partial reform due to the influence of powerful economic forces, the ‘winners’ of economic reform, and to assume that the Russian state lacks autonomy. This paper questions how far reform in Russia has been compromised by the power of winners. The failure of economic reform between 1992 and 1998 is explained as a policy response by state officials unable to manage tendencies towards fiscal crisis because of the state's general helplessness in managing the Russian economy, rather than as a surrender of sovereignty to economic interests.

The Logic of Economic Reform in Russia

This book examines the failure of economic reform in Russia since 1991, when Boris Yeltsin proclaimed his commitment to economic stabilization, privatization, and price liberalization. Optimism over Russiai?½Zs market reforms vanished with the crash of August 1998, when the ruble lost over 70 percent of its value and banks defaulted on their debts and forward currency contracts. Contrary to Yeltsini?½Zs reform promises, the Russian economy of the 1990s more closely resembled a Soviet model than a market-driven one. The Logic of Economic Reform in Russia illuminates the general problems of establishing market economies in settings where the institutional system to support the market has not had decades to develop. Suggesting that corruption may be associated with growth in the early stages of capitalism, Jerry F. Hough argues that the disappointing results of Yeltsini?½Zs reform efforts were not the product of Russian culture or history, but the logical consequences of rational men responding to the incentive system created by economic reform.

Different paths to economic reform in Russia and China: causes and consequences

Economic reform in Russia has been described as ‘shock therapy’ because rapid industrial privatization, price liberalization and democratic reforms of the political system were introduced simultaneously. However, shock therapy led to insider control of most manufacturing firms, with important consequences for foreign investment. In contrast, China’s ‘gradualist’ reforms, without privatization or significant democratization, facilitated foreign joint ventures as the dominant means of reforming State-owned enterprises incrementally. This paper proposes an explanation for these contrasting reform paths in Russia and China and then traces their consequences for inward foreign domestic investment (FDI), exporting and for corporate governance in the short and long term. The impact of national level policies on enterprises is demonstrated in a matched pair of cases in Russia and China. Conclusions are drawn for policy, for practice and for future research.

Without a Map: Political Tactics and Economic Reform in Russia, by Andrei Shleifer and Daniel Treisman, Cambridge, MA: MIT Press (2000). Reviewed by Marshall I. Goldman

Without a Map: Political Tactics and Economic Reform in Russia, by Andrei Shleifer and Daniel Treisman, Cambridge, MA: MIT Press (2000). Reviewed by Marshall I. Goldman

Book Reviews

Books reviewed:Andrei Shleifer and Daniel Treisman, Without a Map: Political Tactics and Economic Reform in RussiaGraeme Gill and Roger D. Marwick, Russia's Stillborn Democracy: From Gorbachev to YeltsinVladimir Mau, Russian Economic Reforms as Seen by an InsiderKate Hudson, European Communism since 1989: Towards a New European Left?Andrew Chadwick, Augmenting Democracy: Political Movements and Constitutional Reform during the Rise of Labour, 1900–1924Norman Fairclough, New Labour, New Language?David Coates, Models of CapitalismAlexander de Conde, Presidential Machismo: Executive Authority, Military Intervention, and Foreign RelationsBernard Crick, Essays on CitizenshipNick Pearce and Joe Hallgarten, (eds) Tomorrow's Citizens: Critical Debates in Citizenship and EducationChristian Joppke, Immigration and the Nation State: The United States, Germany and Great BritainRobert Geyer, Christine Ingebritsen and Jonathon W. Moses, (eds) Globalization, Europeanization and the End of Scandinavian Social Democracy?John Campbell, Margaret Thatcher, vol. 1: The Grocer's Daughter

Without a Map – Political Tactics and Economic Reform in Russia

Without a Map – Political Tactics and Economic Reform in Russia

Without a map: political tactics and economic reform in Russia

Recent commentators on Russia's economic reforms have almost uniformly declared them a disappointing and avoidable—failure. In this book, two American scholars take a new and more balanced look at the country's attempts to build capitalism on the ruins of Soviet central planning. They show how and why the Russian reforms achieved remarkable breakthroughs in some areas but came undone in others. Unlike Eastern European countries such as Poland or the Czech Republic, to which it is often compared, Russia is a federal, ethnically diverse, industrial giant with an economy heavily oriented toward raw materials extraction. The political obstacles it faced in designing reforms were incomparably greater. Shleifer and Treisman tell how Russia's leaders, navigating in uncharted economic terrain, managed to find a path around some of these obstacles. In successful episodes, central reformers devised a strategy to win over some key opponents, while dividing and marginalizing others. Such political tactics made possible the rapid privatization of 14,000 state enterprises in 1992-1994 and the defeat of inflation in 1995. But failure to outmaneuver the new oligarchs and regional governors after 1996 undermined reformers' attempts to collect taxes and clean up the bureaucracy that has stifled business growth. Renewing a strain of analysis that runs from Machiavelli to Hirschman, the authors reach conclusions about political strategies that have important implications for other reformers. They draw on their extensive knowledge of the country and recent experience as advisors to Russian policymakers. Written in an accessible style, the book should appeal to economists, political scientists, policymakers, businesspeople, and all those interested in Russian politics or economics.