Chapter examines models of interaction between business and government of different levels comparing western and eastern parts of Russia on the basis of Russian enterprises survey data. In addition, we analyze the changes in the models of interaction between business and government in Russia comparing the results of two surveys of enterprises that characterize the behavior of enterprises before and after the crisis of 2008–2009.
During the early 2000s the market liberalization reforms to the Russian economy, begun in the 1990s, were consolidated. But since the mid 2000s economic policy has moved into a new phase, characterized by more state intervention with less efficiency and more structural problems. Corruption, weak competitiveness, heavy dependency on energy exports, an unbalanced labour market, and unequal regional development are trends that have arisen and which, this book argues, will worsen unless the government changes direction. The book provides an in-depth analysis of the current Russian economic system, highlighting especially structural and institutional defects, and areas where political considerations are causing distortions, and puts forward proposals on how the present situation could be remedied.
The chapter focuses on the alternative measures of the relative competitiveness of Russian manufacturing enterprises and on assessing the changes in the distribution of manufacturing firms by those measures between 2005 and 2009.
To help right the imbalance in attention in between oligarch firms and the rest of the economy, we report results from two original surveys of 500 firms conducted in 2000 and 2007 in eight regions in Russia that explore the business environment for manufacturing and service sectors. We find that the formal and informal rules of the game for everyday firms in Russia have changed dramatically in the Putin years. Most importantly, while the informal and formal rules of the game were essentially the same for successful and unsuccessful firms in 2000, by 2007 regional governments in Russia had come to favor successful firms through a variety of informal and formal means in ways that were absent just seven years earlier. This shift in the rules of the game in favor of successful firms suggests that a core group of firms in the regions under study have managed to cooperate with the regional government to temper the weak institutional environment in Russia. On one hand, this arrangement is clearly a “second-best” option for economic development over more neutral rules that provide a level playing field for all firms. On the other hand, it is likely an improvement over “third-best” options that involve the state using its power to punish successful firms to reward less successful firms. More generally, this change in informal institutions in a relatively short time suggests that informal institutions are mutable than many accounts suggest.
The future of Russia depends on whether the elites can agree on new rules of the game. Russia’s highest offi¬cials recognize that in order to preserve the political regime, it is necessary to change the model of relations with business. However, the lack of correct stimuli for bureaucrats at the middle level continues to be a seri¬ous obstacle for development.
Organization and management in Russian companies - Comparative analysis of Eastern and Western regions based on micro data.
Chapter 1: Corporate governance system
Chapter 2: Human Resources and Labor Management
Chapter 3: Welfare
Chapter 4: Marketing
Chapter 5: Transportation / Logistics
Chapter 6: Business-State relations
Chapter 7: Economic sanctions
Appendix A: Outline of ERINA company survey
Appendix B: Survey results on investment, finance, foreign relations and Far East development