Title: Risks of Russian Economic Reforms: Lack of Theoretical Economic Knowledge
1Risks of Russian Economic ReformsLack of
Theoretical Economic Knowledge
- Svetlana Kirdina
- Institute of Economics, Russian Academy of
Science, - Russia, Moscow
2 Main idea of presentation
- to show that the theoretical basis of the
reforms conducted in the society is of paramount
importance - Russia as an example.
3Presentation structure
- The situation in the field of theoretical
economic knowledge in our country during the
disintegration of the Soviet Union (1980-1990) - Which economic theories did our reform-makers
address to and why. - Neo-institutional program of economic reforms in
Russia - Neo-institutional program performance unexpected
risks - The development of Russian institutionalism
- Russian institutionalism on economic reforms
program alternative project - Reforms results
- Conclusion
4The situation in the field of theoretical
economic knowledge during the disintegration of
the Soviet Union
- Political economy of socialism, as the dominant
domestic economic theory, failed to foresee
economical and political crisis in the USSR in
the 1990th - The trust to domestic economic theoretical
knowledge was compromised - Foreign economic theories, neo-institutionalism
especially, became the theoretical basis for
Russian reforms
5Why did Russian reform-makers address to
neo-institutional economic theory
(neo-institutionalism)?
- The creation of new market institutions became
the essence of the reformation process (economic
institutions are the main subject of
neo-institutionalism) - Neo-institutional theories pay a special
attention to formal contracts between economic
actors. The task of Russian reform was to
formulate clearly vague property rights and
economic duties of actors - Neo-institutional theories consider the
transaction costs minimization as a criteria for
creation of new institutions. Russian economy
needed efficient new rules in order to decrease
total economic expenses - Young economists (Yegor Gaydar, Anatholy Tchubays
and others) were at the head of the reforms. They
all had negative attitudes to political economy
of socialism but they knew foreign economic
theories. At that time neo-institutionalism was
popular. Thus Nobel Prize winners for economics
in early 1990th were neo-institutionalists, e.g.
Douglass C. North, Ronald H. Coase.
6Neo-institutional (liberal) program of economic
reforms in Russia
- The support of market privatization/ That means
- - the separation and further merger of
property among responsible economic actors, - - the spread of competition and contract
relations with profit motivation as the main
economic criteria - The transparency of financial flows in economic
activity, because otherwise it is impossible
to define the responsibilities and duties of
economic actors - The development of the economic legislation
basis - Broad participation of citizens and all
hierarchic levels actors in the reform process.
7Neo-institutional program performance unexpected
risks
- political end economic efforts and expenses of
reforming process are extremely high.
Nevertheless the declared targets were not
achieved - reproduction processes are broken, branch and
regional structure of production is distorted,
which leads to the decries of economic safety of
Russia - economic reforms provoke long-term and permanent
reduction of social development parameters
including degradation of human potential, the
deepening of income inequality, criminalization
and corruption.
8The development of Russian institutionalism
- the institutional theory of Russian economic
evolution (by O. Bessonova) - the theory on institutional basis for different
economic forms (by N.Lebedeva and N.Drozdova) - the institutional matrices theory (by S.
Kirdina). - Using some modern ideas of neo-institutionalism,
these concepts creatively developed the
traditions of political economy of socialism and
Marxist sociology.
9The institutional matrices theory (one of Russian
institutionalism example) was already being
presented
- The first workshop of the ESA Social Theory
Research Network, Copenhagen, 2000 (Main
provisions of the institutional matrices
theory) - The 5th Conference of the ESA "Visions and
Divisions Challenges to European Sociology",
Helsinki, 2001 (The Institutional Matrices
Theory in the Context of Modern Sociology) - XVth World Congress of Sociology, Brisbane, 2002
(The institutional matrices of society) etc.
10Main differences between Russian
institutionalism and neo-institutionalism
- interpretation of the term institution. Russian
institutionalism pays more attention to
historical components of institutions and their
dependence on the environment and cultural
context, where socium is being developed. That
is material and technological conditions,
geography and other parameters - Russian institutionalism studies some non-market
institutions neither the deviation from normal
reproduction process nor as institutional traps
but as some separate natural and rational
phenomena.
11Russian institutionalism on economic reform
program alternative project
- Modernization rather than revolutionary change of
institutional structure - Market transformation doesnt mean the
replacement of existing institutions by the new
ones, but it means that these new market
institutions fill in the gapes in institutional
structure typical for Russia - The specifics of external limits of economic
development such as natural, geographical and
technological is also taken into account.
12How does neo-institutionalism interpret the
results of Russian reforms?
-
- revolutionary process of economic structure
change is going on in Russian society - traditional paternalistic values of Russian
population prevent the in-depth development of
market economy.
13How do the theories of Russian institutionalism
explain the results of Russian reform?
- There is the modernization of inherent economic,
political and ideological institutions into new
forms - The institutional structure complemented with new
institutions so that to ensure the necessary
variety of political, economic and social life.
The lack of such institutions in the former USSR
contributed to its collapse.
14Conclusions (1)
- The same trends which were typical for the
Russian society development at that transition
period were reflected in the development of
theoretical economic knowledge. - On the one hand, foreign institutions were
actively implemented, such as market economy,
federal state structure and new values of
personal rights and freedom. - The same process was observed in the economic
theory. New methodology was developed on the
basis of American and west-European
neo-institutionalism.
15Conclusions (2)
- On the other hand, in 1990-2000th there was
modernization of inherent Russian institutions
and their adjustment to the global world
challenges. That is why, state regulation and
entrepreneurship were renewed hierarchic
vertical of power in Russian unitary state was
modernized and became stronger traditional
communitarian values expressed themselves in new
ideological forms. - The same process took place in the economic
theory. The Russian institutionalism based on
domestic achievements in political economy and
Marx sociology, starts to develop rapidly.
16Conclusions (3)
- At present the balance of trust between external
and internal innovations both in economy,
politics, ideology and social science as well
starts to shift from foreign to Russian ones.
In practice, it means that domestic theoretical
works are in more demand. - That is why risks and expenses of Russian reforms
can be reduced. And we will see that there is
nothing more practical than a good theory.