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What we need is re-economization, rather than re-industrialization!

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The crisis in the Russian economy has, as the author puts it, in-country origin, and therefore it can be overcome in a short time. However, breakthrough is needed to place Russia in the technological, economic and social coordinates which are relevant for the XXI century. Russian economists suggest various models of domestic economy which differ in their conceptual and instrumental orientations. Among these models, strong public support is given to those ones which are oriented toward conservation of historical and economic features of the “Russian path”. Nevertheless, each of these models is of unpredictably experimental character, while Russia, as the author argues, has «exhausted» its right for experimental trials in the previous century. In contrast, the author provides justification for general economic values which had already proven its relevance to the social efficiency, and which are seen as the basis for modern market civilization. The author is concerned that the idea of re-industrialization which has become popular nowadays, will emphasize the technocratic character for inevitably forthcoming reforms. The concept of “re-economization” is introduced in the paper as the viable alternative for the concept of re-industrialization. As the author puts it, due to latent change in the Russian economy that had taken place in post-Soviet period, the basis for systemic market transformation have already shaped. The main points of the article involve the problem statement, explanation of the essence of re-industrialization, summary on the diagnosis of the Russian economy, and justification for the need for re-economization as the process of systemic market reforms.

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Evolution of tax institutes and transition towards economic growth

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The paper proposes to consider the tax system in the light of the evolution of tax institutions (rules and instruments) guiding economic agents’ behaviour. This approach makes it easier to justify the choice among the main directions of reforms in this sector of the Russian economy, which has traditional economic and sociocultural specificities. In this context, it is very important to analyse not only formal tax rules (laws, regulations, instructions, etc..), but also informal rules used by different branches of government, tax authorities and taxpayers. The analysis showed that in recent years the tax system of the Russian Federation has consistently improved, which was reflected in the dynamic of its position in Tax Paying Rating by PricewaterhouseCoopers and the World Bank Group. However, the great tax legislation improvement has not been accompanied adequate changes of informal tax norms. On the one hand, this is because it takes much time to form the new tax memes, habits and organizational routines, and, on the other hand, unlike in Western countries the economic environment in Russia has a lesser degree of transparency. Currently, the Russian government proposes different measures of tax policy that could solve the problem of fiscal consolidation. However, the general logic of successful tax evolution requires a different approach connected with tax measures that promote scientific and technological innovation and investment in the development of competitive proactive economic actors population. In this case the fact that the Russian government follows the previously announced policy not to tighten tax, as well as it adopts only that improvements which will be clearly understood by economic actors as part of the long-term national development strategy is of fundamental importance. To improve tax institutes also require long-term positive business practices based on cooperation and feedback from the political authorities and government bodies, which build a credible and solid foundation for cultivation of new informal tax rules in order to stimulate rapid socio-economic development.

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Creative industries: problems of market transformation

TERRA ECONOMICUS, , Vol. 14 (no. 4),

Economic development is characterized not only by emergence of new industries and increasing complexity of the mechanism of their integration with social production. Since the market forms of organization prevail in modern economy, the creative industries are able to receive the status of an essential element of the modern economy and form a «creative market». The main problem is that the market form usually does not correspond to the nature and results of creative activity. The paper deals with the complex theoretical and practical problems associated with the market transformation of traditional forms of organization of creative activity. The author shows that the market transformation of creative scope involves formation of the three basic elements of the emerging market of creative goods and services: sustainable demand, stable supply and free pricing. The author concludes that development of creative economy is of utmost importance for the Russian regions (especially – for the North Caucasus, where the geopolitical factors show necessity to link the economic situation in the region with the situation of neighboring regions). Targeted development of sectors of the creative economy in the North Caucasus is seen by the author as the real factor to significantly minimize the subsidized component in the North Caucasus economy.

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Hidden income of households: an empirical evidence

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The paper presents the results of micro-data analysis, showing distribution and level of household hidden income. Modern trends in foreign and Russian studies on hidden income of population are described. Econometric evaluation of the extent of hidden income relies on the panel data of “The Russia Longitudinal Monitoring Survey – Higher School of Economics (RLMS-HSE)” (covering the period from 2006 to 2014). The analysis uses the logistic regression model, with the binary variable as the dependent variable, which equals 1 when current household expenses and savings exceed the household disposable resources for two adjacent periods. This method enables the author to identify households that use to consistently underestimate their income. As the findings have shown, a large number of households underestimate their income regularly. Thereby distortions in the interpretation of welfare indicators such as inequality and poverty take place. The relationship is identified between the presence of household hidden income and other socio-economic characteristics of households, their income level and settlement behavior. It is argued that the assessment of the household consumption is a more reliable indicator of well-being compared to the current cash income.

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The formation of Russian public procurement system on market principles

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The article deals with transformation of the Russian procurement system of products for the public needs for the past 25 years. The author describes the process of introduction of new institutions and construction of new institutional mechanisms of interaction in the emerging quasi-market. The impact of international procurement experience is taken into account, as well as vestiges of the Soviet system of public administration, macro-economic, regional and socio-political factors. The chronology of modernization of regulatory support in the sphere of management is shown through the prism of economic policy measures, along with the number of problems in the regulation of public purchases system and their impact on the behavior of state and municipal customers and suppliers. The ideological component of market reforms directed at monitoring and preventing corruption and improving the efficiency of public expenditures is emphasized, demonstrating transition from an industrial policy to the competition policy. Against the background of the evolutionary development of a formal system of rules it becomes obvious that the public procurement issues lurk in the very concept of law, almost always appropriate to the needs of economic agents. For example, the formation of the institutional environment of the market of public procurement concludes the low efficiency of the state self-control in Russia’s modern history.

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Enhancement of the institutional environment of public procurement market in the context of risk reduction

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The article deals with the issue of improving institutional environment in the government and municipal procurement in Russia. The analysis is focused at the present stage of these systems’ evolution – establishment of the contract system, featured by increased digitalization of all stages of procurement cycle (planning, implementation, contracting, performance verification). Survey of expert opinion on the public procurement management have been conducted among a sample of the course attendees who raised their professional level in a Pilot Center of Public Procurement of the Southern Federal University, Rostov-on-Don, Russia. Research findings have shown that in Russia, increase in transparency of procurement procedures when electronic auction serves as a prior method for the supplier/contractor to be chosen, ensures competitiveness of tenders. Implied risks are inefficient use of budgetary funds, poor addressing of social needs, as well as the risk of corruption. Measures to mitigate the risk of corruption are introduced, including, in particular, development of public procurement monitoring e-system which would involve, along with the electronic auction, open electronic competition as a method to identify the supplier/contractor.

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N.I. Sieber as a solitary but influent scholar

TERRA ECONOMICUS, , Vol. 14 (no. 4),

Nikolay Ivanovich Sieber was without doubt an influent scholar. But at the same time he was isolated, writing a big deal of his production from Switzerland. How is it possible, for a scholar that is not a Minister, not a popular professor among his students, not an applied economist all the time on the roads, but instead a library rat, a scholar sitting at his desk, an armchair economist, to have such an influence on the course of political economy? The controversy between Sieber and Chicherin on the significance of Marx as an economist is first taken as an example of Sieber’s influence. The paper then shows that what is known today on Sieber’s network is very lacunar. Especially, Sieber lived during a decade in Switzerland, in the cities of Bern and of Zurich, and his contacts at the time are only vaguely known. There was a vast diaspora of exiled Russians in Switzerland, including many Russian revolutionaries and Ukrainian activists. Russian citizens travelling legally in Switzerland, especially for education purposes, also commonly visited the cities in which Sieber lived. Sieber presumably met these people, and this is what suggests the scarce sources that we know. It is also difficult at this stage to ascertain his network of correspondents from Russia. And we know nothing about his links with local Swiss people. As a conclusion, Sieber’s characterization as a solitary scholar is perhaps to be retained temporarily only, and his network is to be investigated further to get a fuller picture of his influence among his contemporaries.

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N.I. Sieber as an armchair economic anthropologist

TERRA ECONOMICUS, , Vol. 14 (no. 4),

Sieber is known primarily as a talented interpreter of Ricardo and Marx. However, in his intellectual biography there is the second significant contribution that hasn’t been adequately discussed from modern positions yet. Sieber wrote his «Essays on the Primitive Economic Culture» (1883) (more than five hundred pages treatise) during the second phase of his life – emigration to Switzerland. The article attempts to evaluate this work, answering the following questions. What is the contribution of Sieber to the economic anthropology? What is the place of Sieber in classical discussions that took place within the framework of economic anthropology? What Sieber meant by economic culture? What are the results he has come to and what are the methods he used? How Sieber studied the synthesis of history, law, society and the economy? What is the additional value of his biography in capturing Sieber’s ideas? The paper shows that Sieber can be described as an armchair scholar. Marcell Mauss is the closest example. Sieber examines the elements of the economic culture of primitive society, skilfully using multiple eyewitnesses. He is focusing also on the archival residuals in later civilizations and even in the present. The cases provided by Sieber made think he is not so close to an evolutionary approach, so fashionable in the nineteenth century. He describes the institutions and the structure of labor relations, production, consumption and redistribution. Particular attention is paid to his views on cooperation, gift and property. Thus, Sieber fills the gap in the Marxist doctrine as well as he outlines the important generalizations, that in the twenties century formed the new discipline of economic anthropology.

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Sieber and Vorontsov on the capitalist path of development of Russia

TERRA ECONOMICUS, , Vol. 14 (no. 4),

This article examines the economic views of Russian economist Nikolai Ivanovich Sieber. His name thoroughly forgotten and little is found in scientific articles devoted to Russian economists of the nineteenth century. I think that the main reason for this neglect lies in his dedication to Marxist economic theory, the study of which is currently paid little attention by researchers-economists. Sieber is, in fact, the first Russian economist, who was able to understand Marx’s theory in all its complexity and dialectical interrelatedness. In addition, he thoroughly studied the scientific views of the predecessors of Marx, allowing him to understand the ideological unity of Marxism and classical political economy. However, in this article, the main attention is paid to the question of polemics N.I. Sieber with the populists, in particular with V.P. Vorontsov regarding what should be the way of development of economy of Russia. The essence of the dispute was whether the country to develop, on the basis of objective laws of development, those on the capitalist path, or Russia has its own special path of development. Vorontsov and the populists were supporters of non-capitalist development of the country. They believed that in a predominantly agrarian country, which was Russia, there are no necessary prerequisites for capitalist development. Populists fought for the preservation of peasant communities, cooperatives and spoke against creation of large-scale capitalist production in Russia. Sieber denied populist conception about the special way of development of Russia, and defended the Marxist idea that capitalism is an objective stage of development of society and thus is inevitable.

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Adaptive behavior and institutions: examining the organization of higher education in Russia

TERRA ECONOMICUS, , Vol. 14 (no. 4),

The process of institutional change is going very rapidly in the field of higher education. Government reforms have been implemented within a short period of time. Universities tend to be bigger and more expensive, that is why external governmental pressure, as well as the number of regulatory mechanisms, increases. The atmosphere in higher education organizations has become more strained. Therefore, actors who are involved in the educational process, mainly lecturers and students, have to adapt their behaviors to complicated and constantly changing rules. The paper aims to identify adaptive behavioral patterns of actors involved in the higher educational process. Institutional economics and qualitative research methodology are addressed as the conceptual framework which is intended to contribute to the understanding of the adaptation mechanisms in the field of higher education. We have conducted and analyzed fifty in-depth interviews with the key actors within the universities of Rostov Region (Southern Federal District, Russia). Unfortunately, the implemented reforms are usually perceived as badly prepared, poorly negotiated and incompatible with present working rules and prescribed values. It has been found out that lecturers try to mitigate the effects of the new orders through obedience and opportunistic behavior. Meanwhile, the majority of students tend to adopt the changes. Active engagement of the representatives of communities from higher education through public discussions is suggested as necessary to the reform success.

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