The paper fills the gaps between the scale of application of leniency program (LP) almost in every competition jurisdiction in the world and the concentration of the effect assessment on developed countries only. An empirical assessment of LP introduced in Russia in 2007, under imperfect antimonopoly provisions on collusions showed the effects of the changes in the rules of antitrust enforcement on the behaviour of market participants. I test the hypotheses of the impact of LP enforcement on the characteristics of collusion (types of agreement, duration and number of participants). I show that the first version of LP in Russia (2007) made antitrust enforcement less effective and accordingly reduced collusion detection. However, the reform of LP in 2009 provided the positive results. Even in very imperfect institutional environment, the improved version of LP (2009) has impact on collusion participants: less stable collusions are destroyed and potential collusions do not appear.
Public procurement procedures prescribed by legislation not only enhance transparency and competition but also entail certain transaction costs for both customers and suppliers. These costs are important to the efficiency of the procurement system. However, very few previous studies have focused on estimating procurement costs. This paper proposes a methodology for public procurement cost evaluation. We show how procurement costs can be calculated using a formalized survey of public customers. This methodology was tested with a representative group of public customers operating in one region of the Russian Federation. We formulate the policy implications of our study as they relate to the improvement of public procurement regulations and argue that this methodological approach can be applied in other developing and transitioning economies.
Upgrading skill formation has become an increasingly urgent task for societies facing the challenges of rapid technological change and globalization. However, reform of systems of vocational education and training (VET) poses severe challenges for aligning the interests of schools, firms, households, and governments, even in societies with relatively efficient markets for labor and education. Where market institutions are poorly developed, these challenges are particularly acute, resulting in endemic mismatches between the supply and demand of skill. Currently governments in many countries, including the United States, Russia, and China, are seeking to adopt elements of the German dual education model. The Russian federal government has undertaken several initiatives designed to upgrade VET by encouraging closer cooperation of vocational schools and firms at the regional level, including the adoption of dual education programs. This paper focuses on one such project: a 2013 pilot program administered by the Russian Agency for Strategic Initiatives, to foster the development of new models of dual education. The paper compares the 13 pilot regions with regions that submitted proposals but were not selected and with all other regions along multiple economic, social, demographic, and institutional dimensions. The findings suggest hypotheses about the conditions that enabled the pilot regions to take advantage of federal policies encouraging the adoption of dual education. More generally, the paper sheds light on institutional solutions to collective action dilemmas in skill formation in transitional and developing societies.
Trends of corporate governance development in Russian large firms typical for the 2000s are considered. Incentives for improved CG in Russian companies were pushed by regulators and the federal government as owners of big companies. Business was facilitated by their participation in the elaboration of new legal rules, early pre-announced changes, and possibilities for their “soft” implementation against the background of companies’ growing motivation to use CG tools for strategic development.
The growing attention of governments, international organizations and NGOs to public procurement issues over the last two decades has been accompanied by many studies on the efficiency of public procurement. However, few researchers have considered the costs of procurement regulation for public customers and private suppliers. This problem is especially acute for the public procurement system in Russia. In this paper we propose an approach to measuring public customers’ procurement costs. We test this approach with the data on a large Russian public customer: Voronezh State University. We show that the proposed approach is universal and can be applied at a micro level by other public customers to measure the efficiency of their procurement and to optimize the costs. This approach can also be used as a basis for a larger inquiry into the costs and effectiveness of procurement at the level of regional authorities or sectoral ministries.
This paper investigates the role of managerial ownership and incentive payment as potential drivers of innovation decisions by firms and as shifters of the competition-innovation link in Russian manufacturing industry, where poorly protected property rights and path dependent market structure (typical for many transition economies) leads to a variety of outcomes. We use recent survey-based microdata for nearly 2000 non-listed companies in Russia. Our results suggest that managerial ownership, which initially evolved as a means of protecting against and resisting dysfunctional institutions, may stimulate decisions to undertake R&D and risky product innovations. Futher, managerial ownership and competition are complementary motivations for R&D and innovation. Incentive payment to hired managers. Incentive payment to hired managers is a positive commitment instrument but it has no impact on competition-innovation link.
The improvement of the investment climate in Russia encouraging an inflow of foreign direct investment into the country’s economy is being declared at the highest levels of the Russian government as an important objective for the further economic development of the country. One of the most important instruments for that improvement should be the consideration of the foreign investor’s opinions and ideas and reaction to the most urgent and critical issues which serve as obstacles to their investment activities in Russia.
This paper considers the case of Japanese investors in Russia. It is based on the results of a survey of Japanese companies doing business in Russia (members of the Japan Business Club Moscow) and content analysis of a set of interviews with the representatives of Japanese business and academic community and non-governmental organizations representatives.
We identify which factors attract Japanese capital to Russia and which hinder investment activities. Studying Japanese investment in Russia reveals the particular challenges and obstacles that make Japanese companies reluctant to engage in business activities in Russia. The research reveals and systemizes the factors restricting the development of investment cooperation and their roots, and identifies possible ways of overcoming these challenges.
The analysis shows that the constraining factors can be divided into 3 groups by the origin: external – associated with the problems of the investment climate in Russia, internal – revealing from the specific features of the Japanese production and management system and other factors – non-economic factors, which mainly concern business culture and informational issues.
This chapter provides historical evidence of innovation-led structural changes at the sub-national level in high-middle income economies, with particular emphasis on economies characterised by a significant knowledge base and weak institutions. Although manifestly not the outcome of smart specialization policy, the examples of self-discovery, entrepreneurchip and experimentation discussed here describe real-life smart specialization processes. Lessons are drawn to inform S3 policy designs and implementation: (1) Most success stories occurred spontanously, with limited policy interventions, and were led by self-discovery of private and public actors; (2) regional development is usually a by-product of the national or global success of private first movers that can initiate exclaves but may fails to become developed regional clusters; (3) 'Critical mas' of capabilities is a key policy problem at the sub-national level; (4) Collective action and coordination problems impede the S3 process; (5) Complementarity of various regional policies may increase the effectiveness of government support.
This article considers the mutual influence of antitrust enforcement in petroleum product markets and competition legislation in Russia. An analysis of infringement decisions of the Russian competition authority allows us to understand the perceived goals of economic policy in this sector. The shift from antitrust investigations and infringement decisions to a very specific set of remedies is explained by the desire to maintain low retail prices under increasing concentration without price subsidisation and without promotion of the entry at the refining stage of the value chain. The article highlights the specific use of antitrust legislation to maintain low fuel prices and to support independent retailing companies. We also note the limitation this policy faces. The goals and effects of antitrust enforcement in the industry explain, in turn, the specific path of competition legislation development in Russia.
This article analyses how the intensification of centralized monitoring within public organization may impact incentives for efficiency in those divisions of the organization that have different levels of financial autonomy. The efficiency of divisions’ activities was estimated through their procurement effectiveness. All the divisions were classified as non-commercial units (NCU) funded by the government or as income earning units (IEU) operating in the market and having broader financial autonomy. The results show that under standard monitoring, the IEU had more efficient procurements compared to the NCU. After intensification of centralized monitoring, the differences in performance became insignificant. These findings show that stricter monitoring is efficient for organizations with soft budget constraints, while for organizations with hard budget constraints it is preferable to use more flexible regulations.
The paper is focused on assessing the risk factors for Russian manufacturing firms posed by sanctions imposed on Russia by the EU, US, and other countries in 2014. While there is an extensive literature assessing the successes and failures of international sanctions on the economies of both those imposing and targeted by sanctions on a macroeconomic level, we are more interested in trying to understand the corporate response – i.e. which firms evaluate the introduction and increasing scale of economic sanctions as a threat to their corporate strategy, and their possible reactions aimed at adjusting to a changing environment due to the geopolitical shock. Our research, based on a recent survey of manufacturing companies, provides evidence that over the last decade Russian manufacturing firms have become much more integrated into the global economy than is commonly assumed, through foreign direct investment, foreign trade (including imports of both technological equipment and raw materials and components), international partnerships, and by extensively supplying foreign companies that operate in Russia. Considering the self-selection effect of the top-performing firms in terms of foreign trade, we can state that sanctions could prove most harmful not only for the targeted firms, but for the entire population of better-performing and globalized firms involved in foreign trade with the EU and Ukraine. Thus, the impact of the sanctions on the prospects of the Russian manufacturing sector may be very strong over the medium-to-long term.
Few tasks are more important in the post-communist setting than rebuilding the welfare state. We study individual preferences for increasing social welfare spending to reduce inequality. Using two surveys of about 34,000 and 37,000 Russians we show great importance of the bridging type of social capital for redistribution preferences in Russia as it precludes possibilities of cheating and free-riding. Instrumenting social capital with education, climate and distance from Moscow we deal with endogeneity concerns and also contribute to the understanding of the deep roots of social capital in Russia. We also claim that social capital in post-socialist countries could help mobilize public support for the redistribution schemes in spite of the fact that institutions are weak
We show how a price analysis of stable relations between customer and supplier in the public procurement of homogeneous goods can help differentiate opportunistic from honest behaviour among economic agents. We consider two types of stable relations: repeated procurements and connections based on the state ownership of suppliers. On the basis of a large dataset on the procurement of granulated sugar in Russia from 2011 to 2013, we find that for private suppliers, prices of repeated contracts were lower compared to one-time deals when procured through more transparent procedures and higher when procured through non-transparent procedures. For non-transparent procedures, we observe significant overpricing of contracts with state-owned suppliers compared to private suppliers, especially in the case of repeated contracts, whereas for competitive e-auctions, there is only a small difference between the contract prices of state-owned suppliers and private suppliers.
Compliant activism – that is, political activity of the population, either fully supporting the regime, or merely criticizing individual shortcomings of its policies – strengthens authoritarian rule. However, compliant activism can over time turn into non-compliant one. Hence, the regimes need to ensure that the norms of compliant activism are internalized by the society and become self-enforcing. We use the case of the Communist legacies in Russia to show that compliant activism can, indeed, become highly persistent and outlive the regime, where it emerged. Using cross-regional variation in the levels of compliant activism in the contemporary Russia, we demonstrate that it is strongly affected by the variation in the membership share of the Communist Party of the Soviet Union in the 1970s. The results have broader implications beyond the Russian case and provide relevant insights for studying political activism in autocracies.
The aim of this article is to conduct an empirical investigation and reveal which types of modernisation strategies and characteristics of regional institutional environment are likely to be associated with patterns of the performance of Russian manufacturing firms in 2007–2012. In addition to estimating the impact of ex-ante behaviour on the rate of sales growth, we use hierarchical cluster analysis to reveal the typical trajectories of firms’ sales growth. We find that the dynamic of sales for more than 90% of firms can be described by just two types of performance curve: (a) crisis decline with recovery and growth; and (b) crisis decline with weak recovery and stagnation. Firms that invested more prior to the crisis and implemented active restructuring were more likely to have positive post-crisis dynamics of sales. We find evidence that firms in the regions with lower levels of corruption (both administrative and everyday) were more likely to recover successfully after the crisis.
Angesichts anhaltender Expertendiskussion über die Perspektiven der russischen Wirtschaft auf Wachstum und der gegenwärtigen Ausarbeitung einer neuen Entwicklungsstrategie für Russland geht der Artikel drei zentralen Fragen nach: Warum waren einige Reformen in Russland erfolgreich, warum scheiterten andere und welche Lehren lassen sich aus diesen Erfahrungen ziehen? Die zentrale These lautet, dass ein breiter Kreis von Stakeholdern in die Planung und Umsetzung von Reformen einbezogen werden muss und die Eliten eine gemeinsame Zukunftsvision entwickeln müssen, sollen zukünftige Reformen erfolgreich sein.