Russian Summer School on Institutional Analysis - Research Projects 2018
The main objective of the study is to assess the effects of the government’s purchases on firm dynamics after the 2008 – 2009 financial crisis. Using the survey database of the 1950 Russian manufacturing firms combined with the publicly available financial data, we shall also examine the impact of public procurement contracts as an instrument used by the State for indirect support combined with traditional measures for direct support. First of all, we suggest that the precise impact will depend on the internal characteristics of the enterprise (size, age, ownership structure). In particular, the positive effect is more likely to be observed in small organizations, since those will begin investing in new technologies and human capital and improving their reputation. Given the assumption for the “system of exchanges” between the State and business, we could also expect that for the firms which have systematically assisted the authorities, as well as members of business associations, this positive effect will be weaker. On the other hand, in the model of «state capture», we won’t get any positive effect of government purchases. Moreover, we strongly believe that the effect will be positively associated with the quality of the institutional environment in the region.
This article reviews the institutional economics researches of slavery and serfdom. The exploration of the comparative institutional advantages and disadvantages of forced labor enriches various historical studies. On the example of the Great Princedom of Moscow, author considers reasons for establishment of the serfdom and how it affected the distribution of welfare.
1. When and why did development ways of Russia and Western Europe parted (the
approach from the institutional economic history perspective).
Russian civilization lies between the civilizations of the West (based on the institution of
private property) and East (based on power-ownership). It combines the contradictory features
of backward Europe and advanced Asia. The development of Russian civilization (IX—XXIth
centuries) can be described as a fluctuation between the pro-eastern (stronger) and the pro-
Western vector of development. The permanent confrontation between these trends was reflected
in continuous conflicts with external aggressors as well as between the Russian states. The
successive domination of eastern institutions can, apparently, be explained by the compatibility of
oriental despotism with the constant the need to cope with external aggression, which has been
threatening the very existence of Russian civilization throughout its development. In the initial
phase of its development (IX-XVIst centuries) the Russian civilization was being shaped under
the influence of institutional export from the politically powerful states such as East (Byzantium,
the Golden Horde, Turkey). The export of institutions from western countries only began with the
XVII century. Such export was always complicated by the path dependency phenomenon, because
throughout the course of its formation Russia has been developing its identity in opposition to
the West rather than the East. The development of Russian civilization can be disassembled
into 6 steps:
1) Kievan Rus (IX—XIII cc.) regarded by some contemporary authors as a European state
(which is particularly reflected in the facts of early dynastic marriages between the Ruriks
and the families of the European rulers);
2) a split of Russian civilization during the Tatar conquest (XIII—XVth cc.): the eastern lands
subservient to the Golden Horde (Moscow princedom) becomes more orientalized, while
the western domain (the Grand Duchy of Lithuania and Novgorod the Great) remains as
the periphery of Europe;
3) the formation of Moscow kingdom (XVI—XVII cc.), which is a period of active confrontation
between four models of the Russian State (Moscow, Novgorod, Lithuanian and Cossack),
which ends with complete victory of the East-oriented Moscow and the gradual fading of
4) Russian Empire (XVIII—XIX cc.), which is a clear example of catch-up development with
selective imports of Western institutions and gradual reduction of the gap between Russia and Europe; however, even by the end of St. Petersburg period Russia could not be
considered a fully European country;
5) the Soviet era (XXth century), a period of counter-modernization and attempts to eliminate
the technological backwardness of Soviet Russia; the party leadership deliberately revives
the institutions of power-ownership in order to ensure the dynamic construction of
6) the post-Soviet Russian civilization splits into three independent states (Russia, Ukraine
and Belarus), each of which demonstrates a particular combination of dynamic pro-
Eastern and pro-Western trend of institutional development, but none of them can still
be considered as having completely adopted a sustainable development path for their
The Russian transformation into a part of Western civilization is highly unlikely. The active
spreading of Western European institutions has always caused the resentment among Russian
people, which is why the history of Russia can be described as a series of constant shifts. i.e. inflows
and out-flows of europeanization. However, in the XXIst century the europeanization policy
for Russia is even less attractive, since at present the Western civilization is gradually losing its role
of a world leader, while the Confucian and Islamic civilizations seek to reclaim such role. The best
option for Russia is to reconstruct its identity as a unique civilization. While being geographically
located on the outskirts of Europe, it is rather a different Europe, an alternative Europe.
2. From “Oriental Despotism” to “Average — weak Capitalism”:
Ragged Path of Institutional Development of the Imperial Russia.
The history of Russia from the start of the Troubles in the XVII, up to the early Twentieth
century. is the period of accelerated modernization can be regarded as a prime example of catchup
development of the second “eshelon” of the development of capitalism. Russian civilization was
trying to compete with Western civilization to import the most advanced institutions, while at the
same time their identity. As a result, overtaking development took the form of fluctuations between
the strengthening of the institutions of private property and the preservation of a transformed
The initial institutional reform was to be the “liberation” of the noble elite of the state. Only
at the end of the XVIII century Russia in the economic freedom of the ruling class was about
the same as the age of the mature Western European institutions of feudalism, the landowners
were “normal” right of private ownership of land and the peasants. However, the state in imperial
Russia remained the main agent of modernization of the economy up to 1917.
A study conducted in 1861 “liberation” of peasants eliminated the feudal institutions of
serfdom and corvee labor, but retained the “Asian” institutions depending on the peasants from
the community and the state. Stolypin’s reforms were an important step towards the formation of
peasant private property, but do not have time to cause irreversible “farm development“. When
V.I. Lenin at the end of the XIX century, draw conclusions about the differentiation of the peasants
on the bourgeoisie and the proletariat, it is strongly “running ahead”. Much closer to understanding
the very moderate degree of modernization of agricultural production areas was A. Chaianov
already in 1920. formulated the concept of a non-capitalist (labor) farm.
The release of industrial production of the “Asian” institutions going too slowly. During the
XVIII—XIX centuries. a large share of Russian entrepreneurs were representatives of ethnic and
religious minorities trade — Old Believers, Jews, Armenians, Germans, etc. In this regard, one
can speak of a very long dominance in the business of the institutions’ traditional capitalism“ —
enterprise system, where competition is mostly off-market (rent-seeking) character. Although at the
beginning of the Twentieth century began to develop a “big business”, Russian “state monopoly
capitalism” is very dependent on state patronage and in many respects was like “antediluvian
forms of capital.”
It should generally agree with Lenin’s definition of Russian capitalism of the early twentieth
century. as “average-weak”. Russia of the early Twentieth century. really should be weak among
the middle — Japan upgraded slightly worse, but significantly better than Turkey. The results of
more than two centuries of conscious experience catch-up were not very expressive and, most
importantly, reversible. Achievements partially successful imperial modernization were largely
thwarted fatally unsuccessful Russian participation in the First World War.
3. Between “Real Socialism” and “Oriental Despotism”: Labyrinths of Institutional
Economic Development of Soviet Russia
Authors proposed the institutional approach to the analysis of socio-economic development
of Russian civilization in the Soviet period, based on its interpretation as a particular example
of catch-study which to engage in the development economics. In 1917—1991 years Russia
carried out in counter-modernization, which tried to solve the same problem faced by all emerging
economies “Third world”, but fundamentally different methods to gain power-property institutions.
Communist ideology played in choosing these methods very important, but not decisive role, on
the contrary, the practice of counter- modernization led to “fit” the ideology of a real opportunity.
Throughout Soviet history several times observed bifurcation situations in which it was
necessary to qualitatively change the “rules of the game”. First bifurcation’s period — the
time of the Civil War, when the confrontation of three socio-economic systems (“Red” Military
Communism , “White” Military Capitalism and “Green” models) completed their common defeat.
Mixed economy NEP could solve the problem of the recovery period, but could not provide a “Big
push”. In the second period bifurcation end of the 1920s ideas of the five main paradigms of
development economics in Soviet Russia were expressed at least partially at — changed in one
way or another everything. Eventually realized peculiar mixture of neoclassical and traditional
institutional approaches to the solution of tasks catching national development. Anticipating
neoclassical ideas 1950—1960-ies, organized the party leadership in 1930 overflow of resources
from traditional agriculture to modern industry, actively using methods noneconomic coercion.
Administrative-command system (created during the “Great Break”) could effectively, albeit with
low efficiency, complete industrialization of the economy. However, post-industrial modernization
implementation should be monitored as part of the Soviet command economy was fundamentally
impossible, it required more workers available and less rigid guide. Third bifurcation period was
a collision of three variants of the “rules of the game” — a model of self- sufficient command
economy (post-Stalinist course) , mixed economy (rate Kosygin reforms) and the command
economy as “raw materials appendage” capitalist world-economy (course “stagnant” Brezhnev
Over the 1950—1960-ies in the USSR attempted economic reforms aimed at introducing
market elements “game rules”, but these are torture were unsuccessful. The failure of the
reform should be linked with the development of various forms of rent-seeking - with the active
development of oil and gas fields for export (extraction of natural resource rents) and with
increasing privileges of statehood bureaucracy (removing bureaucratic rent). In the last decades
of the Soviet economy of its distinctive features are transformed into institutional traps: incomplete
balanced development leads to the substitution of short- term goals, nomenclature power-property
alienates citizens from power and property. Misunderstanding of the Soviet political elite need to
transition to a post-industrial economy and strengthening the independence nomenklatura finally led to the decline and collapse of the Soviet economic model. The author’s concept based on
a generalization of the works of domestic and foreign social scientists 1990-2010-ies (G. Hanin,
R. Allen, G. Popov, A. Markiewicz, Yu. Ol’sevich, P. Gregory, etc.).
4. Institutional Development in Post-Soviet Russia: in Search for an Escape from the Pathdependence
In the analysis of socio-economic development of Russia 1990—2010s stresses that many
institutions of “Asiatic mode of production” continue to develop even after the foundations of
a market economy. It is connected with the fact that the radical economic reforms of the early
1990s. carried out the revolution “from above”, aimed primarily at consolidating the new political
regime. As a result of privatization — key economic reforms — adopted the nomenclature and is
accompanied by the erosion of property rights rather than their further specification.
Already in the late 1990s “Russian Drama” is labeled: even after all originally planned major
economic reforms and political stability Russia can not provide one hundred-stably high rates and
the quality of economic growth. Although there is an explanation of the “Russian drama” with the
positions of all the paradigms of economic-development theory, the authors focus on institutional
and regional approach and track the changes in the “rules of the game” in the behavior of all three
actors of the Russian economy.
The post-Soviet households have gone from survival in the 1990s to develop in 2000—
2010’s, but in the last decade, they retain a strong dependence on the state. This is manifested,
in particular, that the contradiction between the “people and the government” during the opinion
polls, Russians considered to be more relevant than conflicts between employers and employees.
In business, there is also a combination of market progress and “Asian” stagnation. On the
one hand, to the beginning of the 2000s. institutions of barter were liquidated and integrated
business groups were formed. They are interested in unification and efficiency “rules of the game”.
On the other hand, the economy remained largely unproductive entrepreneurship (by W. Baumol):
this is manifested not so much in a candid business fraud (as in pyramid schemes), but the
predominance of rent seeking activities.
Most clearly dependent on the previous “Asian” development can be seen in the activities of
the Russian state, which claims the monopoly in the construction of the Institution. As a result,
in the legal economy remains strong relationship between business success and on-relations with
the authorities, and in the shadow economy has evolved institutional corruption.
Thus, post-Soviet economic history demonstrates competition institutions of governmentowned
and private property in the activities of all the actors of economic life. There is a certain
analogy between the post-Soviet social and economic development and colonial modernization of
modern era: in both cases “the loss of the old world without acquiring a new” (according to Marx)
initially observed, and then only “creative work” becomes gradually visible for “heap of ruins”.
5. What will the future bring? (Light and shade concept of long-term socio-economic
development of Russia).
The modern concept of modernizing Russia somehow reproduce the history of the theory of
innovation. The theory of innovation in its development has gone through a least 3 stages. In the
first phase (1910 - first half of the 1940s) to the forefront issues of understanding the nature
of innovation and their role in the development of society over time (long, medium and short
periods), the relationship of innovation and long cycles conditions. This period is associated with
the names of J.A. Schumpeter, M.I. Tugan-Baranovsky and N.D. Kondratieff. The second stage in
the development of innovation theory (second half 1940 — first half of the 1970s) is characterized by the increased role of macroeconomic analysis, in turn, he has at least two substages: the first
of which was dominated by the ideas of neo-Keynesians, on the second-neoclassical. The third
stage of development of the theory of innovation began in the mid-1970s and proldolzhaetsya
to the present. It is characterized by an offensive alternative approach to macroeconomic theory.
With a certain degree of conditionality is also possible to distinguish two substages. The first
(second half of the 1970s — early 1990s) is characterized by the emergence of new ideas drawn
from evolutionary theory, institutionalism (the theory of the firm) and management (innovation
management). In the second substage (mid 90s) innovations studied by the methods of systems
analysis. The authors are increasingly focused on issues of comparative studies: a comparative
analysis of innovation policy in different countries, study the ways and means of forming an
effective innovation systems. In the report it is critically considered not only the official point of
view, but also M. Porter, K. Ketels work “Competitiveness at the Crossroads: Choosing the Future
Direction of the Russian Economy”. Also «The forecast of innovative, technological and structural
dynamics of Russian economy till 2030» and RAND Corporation report “The Global Technology
Revolution 2020: Trends, Drivers, Barriers, and Social Implications” are analyzed. In this paper
institutional preconditions and possibilities of application of the concept of social market economy
in the 21st century Russia were analyzed. Basic elements of social market economy are personal
liberty, social justice, and economic efficiency.
This article consists of a series of short essays dedicated to a certain chapter of the 'popular' socioeconomic history (with a particular focus on the institutional development problems) of the former East Prussia from the Antiquity to present days. The authors tackle the issues of the economic history of amber, the role of the Hanse in the development of medieval trade, the QWERTY-effects in rail rack standards, and the peculiarities of the development of the Kaliningrad region in the post-Soviet period.
RSSIA is aimed at creating and supporting the academic network of young researchers from all regions of Russia as well as other countries, who work in the field of New Institutional Economics. The schedule of the Summer School includes lectures, seminars and plenty of possibilities for discussion and communication. We focus on recent developments in NIE and possibilities and challenges of applied research in the institutional economics framework.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.
We address the external effects on public sector efficiency measures acquired using Data Envelopment Analysis. We use the health care system in Russian regions in 2011 to evaluate modern approaches to accounting for external effects. We propose a promising method of correcting DEA efficiency measures. Despite the multiple advantages DEA offers, the usage of this approach carries with it a number of methodological difficulties. Accounting for multiple factors of efficiency calls for more complex methods, among which the most promising are DMU clustering and calculating local production possibility frontiers. Using regression models for estimate correction requires further study due to possible systematic errors during estimation. A mixture of data correction and DMU clustering together with multi-stage DEA seems most promising at the moment. Analyzing several stages of transforming society’s resources into social welfare will allow for picking out the weak points in a state agency’s work.