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The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet…
The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet institutions collapsed and were either reformed or replaced in a new Russian institutional landscape. The paper presents a fact-based and balanced view of Russia’s evolving role in the global economy, as distinguished from the sometimes one-sided view presented by some Western commentators. The authors establish that the two countervailing views are fundamentally based on different cultural perspectives about institutions, primarily the roles of business and government.
This paper is developed as a perspectives article drawing upon the decades of academic and business experience of all three authors with Russian business, management and the economy. The paper focuses on the structure of Russian institutional change and places it within the historical context of the challenges of various periods of time from the late 1980s to the present. The authors posit that cultural foundations complicate that institutional evolution.
Russia will remain a major player in world markets for energy, raw materials and armaments for the near future at least. Principal institutional questions facing Russia have to do with how to reduce the country’s overall dependence on raw material exports, with its vulnerability to world market fluctuations, and how to modernize Russian economic and political institutions. The degree of success in addressing these questions will depend largely upon the ability of the new and reformed economic institutions to show the flexibility to respond to changes in the global order, on whether political considerations will continue to supersede economic issues, and how markedly cultural traditions will continue to impede positive changes.
The entire system of international trade is under question, disrupted by the growing nationalism that is threatening the globalization that became institutionalized over decades in the wake of the Second World War. Russia’s future role is partially dependent upon how new patterns of international trade develop in response to the current disruption of established trade regimes, and by how political conflicts are expressed economically. The authors observe that Russia’s historical and cultural traditions, especially acquiescence to a highly centralized government with a strong autocratic leader, limit the country’s options. The authors explore how Russia’s reactions to Western sanctions have led to a new strategic approach, moving away from full engagement in the global economy to selective economic, and sometimes political, alliances with primarily non-Western countries, most notably China. The authors contrast Russia’s situation with that of China, which has been able to make substantial economic progress while still embracing a strong, centralized political institutional structure.
Many Western analysts have viewed Russian institutional evolution very critically through the lens of Western politics and sanctions, while Russia has continued along its own path of economic and institutional development. Each view, the authors argue, is based upon differing cultural perspectives of the roles of business and government. As a result, a distinct difference exists between the Western and Russian perspectives on Russia’s role in the world. This paper presents both points of view and explores the future of Russia’s position in the world economy based upon its evolving strategy for national economic policy. The authors contrast the situations of Russia and China, highlighting how Western-centric cultural views have affected perceptions of each country, sometimes similarly and at times with decided differences.
Written in January 1994, discusses the reform of the Russian economy, its severe economic decline, and how the transition to a market economy might be realized. Emphasizes…
Written in January 1994, discusses the reform of the Russian economy, its severe economic decline, and how the transition to a market economy might be realized. Emphasizes the institutions of a market economy and suggests that the current “shock therapy” reform programme of stabilization of the macro‐economy, liberalization of prices, and privatization of enterprises will not succeed in the absence of such institutions. These institutions include a system of property rights, a legal system, a sound currency, legal and regulatory agencies to prevent corruption and monopolization, a social safety net, and entities providing banking and credit, classified advertising, accounting, insurance and other services.
The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability…
The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability of the Russian banking sector to provide financial intermediation in the economy and thus to perform the key functions which society expects from the banking sector – mobilization of savings and financing investments in the real sector of the economy. The study seeks to explain above-mentioned features from institutional, economic, and political perspective on the basis of the existing knowledge of the nature of transition banking.
The post-Soviet space, consisting of the countries of the former USSR and the Warsaw Pact, is a good testing ground for the dynamics of growth. Motivated by the mixed…
The post-Soviet space, consisting of the countries of the former USSR and the Warsaw Pact, is a good testing ground for the dynamics of growth. Motivated by the mixed evidence on economic convergence in the region, this paper explores why countries have performed differently, focusing on institutional strength and its determinants. It proposes the hypothesis that, in the region, Russian influence plays a negative role in institutional development, both through opaque business practices that come with it, and through the isolation from European Union influence it entails. The paper uses recent panel data to test this hypothesis, concluding that there is some evidence supporting a negative effect of Russian influence on post-Soviet states’ institutions, but that more rigorous analysis is needed to confirm this link.
The purpose of this paper is to analyze the outcomes of the financial optimization process launched by the recent reforms in the Russian higher education sector and its…
The purpose of this paper is to analyze the outcomes of the financial optimization process launched by the recent reforms in the Russian higher education sector and its impact on access to higher education, its quality and competitiveness within the sector. The study of the economic performance of higher educational institutions includes complex analysis of financial and educational components of their structural dynamics and their impact on their development strategy.
The methods used in the study of the segmentation of the higher education sector involve a combination of theoretical developments in economics and the modeling of the economic behavior of universities on the market for educational services, procedures for the evaluation of transaction costs in the markets with asymmetric information and recent conceptions of the interrelation of factors affecting quality and accessibility of higher education.
In this paper, the economic potential of Russian universities is considered, making use of a segmentation of the higher education sector, based on sampling of state and municipal higher education institutions from different industry groups, depending on their development strategy under changing social and economic conditions. The research data for 2006‐2009 help to define five clusters of the higher educational establishments with different approaches towards public funding and different strategies.
Based on the research data, the paper evaluates the current situation in the Russian higher education sector and some skewed structures of the reforms and outlines some policy implications.
The chapter contains a methodology for formalized evaluation of the role of the Central Bank of the Russian Federation (Bank of Russia) in ensuring monetary and financial…
The chapter contains a methodology for formalized evaluation of the role of the Central Bank of the Russian Federation (Bank of Russia) in ensuring monetary and financial sustainability with the help of the monetary policy transmission mechanism and its inflation target regime. The significance of the research of the Bank of Russia operations to ensure financial sustainability is due to a number of circumstances: the uniqueness of the Bank of Russia that appeared only 27 years ago and experienced several devastating events related to the 1998 financial crisis, the global financial crisis of 2008–2009, and the stagnation of the Russian economy in 2014–2016, as well as high volatility of world prices for Russian commodity exports and the latest contra-Russian sanctions that significantly affected the volatility of the Russian ruble. Taking into account all the above, the issue of the Bank of Russia’s effective activities in the long run is aggravated by the fact that there are still more open questions than proven relationships of causes and effects regarding the potential of specific monetary policy instruments in the context of low-growth and high-volatility environment. The modeling of the Bank of Russia strategic and operational targets has been based on the parameters’ dependencies presented by the money (credit) multiplier in the interpretation of G. Schinasi (2006) and on the instability of stable economy hypothesis of H. Minsky (2008). As a result, there have been established the marginal levels of definite indicators of the banking system performance that could allow the Bank of Russia to ensure financial sustainability in the low-growth and high-volatility environment.
Attempts to discover an internal logic in the high‐speed events taking place in the former Soviet Union. In addressing the problems of the country′s disintegration, examines the issue in its socioeconomic, political and territorial‐administrative aspects. Analyses, for this purpose, the nature of Soviet society prior to Gorbachev′s reforms, its present transitional stage and its probable direction in the near future.
This chapter sheds light on long-term trends in the level and structural dynamics of investments in Russian human capital formation from government, corporations, and…
This chapter sheds light on long-term trends in the level and structural dynamics of investments in Russian human capital formation from government, corporations, and households. It contributes to the literature discussing theoretical issues and empirical patterns of modernization, human development, as well as the transition from a centralized to a market economy. The empirical evidence is based on extensive utilization of the dataset introduced in Didenko, Földvári, and Van Leeuwen (2013). Our findings provide support for the view expressed in Gerschenkron (1962) that in late industrializers the government tended to substitute for the lack of capital and infrastructure by direct interventions. At least from the late nineteenth century the central government's and local authorities' budgets played the primary role. However, the role of nongovernment sources increased significantly since the mid-1950s, i.e., after the crucial breakthrough to an industrial society had been made. During the transition to a market economy in the 1990s and 2000s the level of government contributions decreased somewhat in education, and more significantly in research and development, but its share in overall financing expanded. In education corporate funds were largely replaced by those from households. In health care, Russia is characterized by an increasing share of out-of-pocket payments of households and slow development of organized forms of nonstate financing. These trends reinforce obstacles to Russia's future transition, as regards institutional change toward a more significant and sound role of the corporate sector in such branches as R&D, health care, and, to a lesser extent, education.
This paper focuses on an analysis of the factors that contribute to differences in political attitudes and political participation of Russian capital owners. Such factors…
This paper focuses on an analysis of the factors that contribute to differences in political attitudes and political participation of Russian capital owners. Such factors may include different size and type of capital, the degree of past political socialization, the respondents’ age and generational experiences, past/present well-being comparisons and education. The paper begins with a discussion of different theories that make hypotheses about the political behavior of capital owners. These hypotheses were tested in a small, exploratory study of Russian capital owners that I conducted in Russia in the late 1990s. The results of the study are then analyzed within two different but closely interrelated contexts: the wider historical context of social, political and economic changes of the first decade of post-Soviet transformation, and the micro-context of the respondents personal political, economic and social history. In the end, I return to the analyses of the original hypotheses and conclude with a discussion of which theory comes closest to predicting and explaining the results of the study.
For at least the last 10 years, the Russian authorities have been declaring the need to move to an innovative path of economic development. The government actively…
For at least the last 10 years, the Russian authorities have been declaring the need to move to an innovative path of economic development. The government actively initiates and applies various instruments and measures to promote innovation. However, the effectiveness of the Russian innovation policy is still in question. The chapter examines the evolution of state policy to foster innovation growth in Russia since 2000 and describes some sets of achievements and problems for different stages of this policy. In addition to analysis of changes in the innovation sphere at the macro-level, we discuss the primary motivations and limitations at the micro-level (firm level). As a result, the critical institutional barriers to innovation-based growth are revealed. In the same time, certain successes have been achieved in some sectors, and we consider various opportunities to improve Russian technological and innovation policy.