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TERRA ECONOMICUS

Socio-economic public policy in times of crises: Historical overview and some implications


TERRA ECONOMICUS, , Vol. 22 (no. 1),

The paper examines economic reforms that various countries (the USA, the UK, Germany, France and Japan) were implementing over the past 100 years in order to overcome global economic crises (the Great Depression, the oil crisis of 1973–1975, the financial crisis of 2008 and the Covid-19 recession). Authors suggest that anti-crisis measures include tactical and strategic components. The tactical component creates conditions for eliminating negative effects of recessions, whereas the strategic component unlocks potential for future economic development. As the evidence suggests, the countries that invest in research and development during economic crises become highly successful in strengthening their positions on the world stage. The paper gives an overview of the most popular macroeconomic policy tools used in times of crises. These are the key rate, open market operations, currency devaluation, government expenditure, tax rates as well as subsidies to households and firms. We show that macroeconomic policy can be contractionary and expansionary. Contractionary policy aims at combating demand-pull inflation, whereas expansionary policy is implemented to increase aggregate output and income. It is important to note that during global recessions monetary policy is usually secondary to fiscal policy. The paper tracks the evolution of labor relations from one crisis to another. We emphasize the increasing importance of public funding of workers’ retraining and changes in labor legislation providing new forms and modes of employment.
Citation: Dementiev V.E., Ustyuzhanin V.L., Ustyuzhanina E.V. (2024). Socio-economic public policy in times of crises: Historical overview and some implications. Terra Economicus 22(1), 6–19 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-6-19

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Implementing territorial development strategies within institutional approach to strategic planning


TERRA ECONOMICUS, , Vol. 22 (no. 1),

In recent decades, the strategic development projects of different spatial dimensions and different levels of government have become widespread. Meanwhile, successful implementation of territorial and local development strategy remains understudied. The existing literature on business strategy have made it possible to identify a number of factors that contribute to strategy implementation. These factors include, among others, the positive attitude of employees towards the company and its strategy. Similar characteristics of residents might be relevant for territorial development. However, local and regional authorities and a range of related organizations vary in terms of resource capacity and methods employed to prepare and perform strategic development projects. These factors can either support or impede strategy implementation. We propose a typology of situations describing the design of a territorial strategy, which provides a link between such factors as territorial identity, local commitment, and strategic consensus, on the one hand, and territorial autonomy, development direction and strategic goals, on the other hand. The article also suggests our interpretation of territorial strategy implementation as a process involving complex interactions of local and regional authorities to enable and coordinate the residents’ efforts aimed at achieving the strategic goals.
Citation: Tambovtsev V.L., Rozhdestvenskaya I.A. (2024). Implementing territorial development strategies within institutional approach to strategic planning. Terra Economicus 22(1), 20–34 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-20-34

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The myth of Leviathan: A new interpretation by a British historian. Reflections on Mark Harrison’s Secret Leviathan: Secrecy and State Capacity under Soviet Communism


TERRA ECONOMICUS, , Vol. 22 (no. 1),

Russia’s stricter information policy since February 2022 and the reduction of various statistical data publications have raised many questions about the legitimacy, necessity, and efficacy of these actions. British economic historian Mark Harrison considers that the modern Russian information policy has taken the Soviet traditions of secrecy. From his point of view, the Bolshevik elite aimed to retain power through mass concealment of the Soviet reality and the propagation of misleading information. Opposite to Harrison’s view, this article identifies the military factor to be the primary reason for secrecy. Secrecy itself is used as a means of ensuring military security and preserving the internal stability of the state. My analysis has shown that secrecy was one of the features common to the countries involved in World War II and the subsequent Cold War. The extended period of military mobilization distinguished the USSR from other countries, which, surely, reflected in a high level of secrecy. This article identifies three periods in the USSR’s information policy, which are distinguished by the level of military threat and government spending on defense. The conclusion states that the issue of secrecy in the USSR is insufficiently examined, and justifies the necessity to pursue a more meaningful modern information policy, taking into account the historical experience.
Citation: Fomin D.A. (2024). The myth of Leviathan: A new interpretation by a British historian.Reflections on Mark Harrison’s Secret Leviathan: Secrecy and State Capacity under Soviet Communism. Terra Economicus 22(1), 35–49 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-35-49
Acknowledgment: The study is performed within the research and development plan stated by the Institute of Economics and Industrial Engineering of the Siberian Branch RAS. Project: 5.6.6.4 (0260-2021-0008), Strategic Methods and Models of the Russian Economy Development in a Changing Macroeconomic Reality.

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How to treat passions? A brief recap of the conversation and its significance in contemporary society


TERRA ECONOMICUS, , Vol. 22 (no. 1),

How to understand human behavior and what to do with passions have been long-standing questions through an old philosophical conversation. (1) In Ancient and Medieval philosophy, the answer had focused on public good and how to suppress human passions by the public authority to direct human behavior toward the public good. (2) Later, as this suppression of passions idea lost its credibility, mainly Renaissance philosophy and Mercantilist literature developed ideas of embracing and harnessing them toward the public good via the public authority. (3) However, as this idea of transforming passions through an authority was also found to be faint, the idea of countervailing harmful passions by beneficial passions, mainly material self-interest, was developed roughly by Renaissance and Early Modern philosophers. This idea and doctrine of countervailing passions has also attracted many criticisms, some of which are mentioned in this article. In this paper, the historical evolution of the conversation of ideas on “how to treat human passions” will be briefly explained alongside the socioeconomic conditions of the time, which is useful to understand the attitudes toward passions. For this purpose, the three parts are organized into three historical periods. In each part, some criticisms toward the ideas of that period will also be mentioned in order to demonstrate the flow of conversation. Finally, this conversation on passions will be discussed in line with our contemporary social experiences, and it will be argued that the Ancient and the Stoic idea of moderation of passions still has significance.
Citation: Özcan E. (2024). How to treat passions? A brief recap of the conversation and its significance in contemporary society. Terra Economicus 22(1), 50–61. DOI: 10.18522/2073-6606-2024-22-1-50-61

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Collective action in climate policy implementation: The role of citizens


TERRA ECONOMICUS, , Vol. 22 (no. 1),

We assess the role of citizens in global climate policy using empirical data from a range of sociological studies. The scale of the environment challenge, with climate change issues as its essential part, usually implies that countries and organizations are treated as the key actors whose influence on climate regulation is significant. Meanwhile, in recent years, scholars and experts pay increasing attention to citizen behavior change. On the personal level, behavior change goals may involve the measures for reducing carbon footprint, as well as pressure on policymakers to encourage climate regulations. The purpose of this article is to assess the current role of citizens (their awareness, attitudes to climate change, and willingness to act) in global climate policy. Our theoretical framework is the theory of collective action and its modifications. We highlight the peculiarities of collective action to counteract climate change, as well as complementary approaches which represent the solution of the “social dilemma” regarding environmental protection from different perspectives. Approaches to citizen engagement in climate change adaptation may vary (instrumental, polycentric, ethical). We found that currently the instrumental approach is being implemented. Our results show that currently citizens’ readiness for collective action on climate change issues is not high. We also found a wide variance across countries and their groups in terms of citizen engagement, and a rather intensive application of behavioral economics tools. We conclude that the role of citizens’ collective action in climate policy implementation addresses such underlying concerns as ethical responsibility towards environmental sustainability and public attention to environmental issues on different levels of the economy.
Citation: Kurbatova M.V., Donova I.V. (2024). Collective action in climate policy implementation: The role of citizens. Terra Economicus 22(1), 62–80 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-62-80
Acknowledgment: The study was funded by the State Assignment of the Ministry of Science and Higher Education of the Russian Federation (FSRZ-2024-0003).

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Exploring brand equity assessment within consumer perception. Case of the jeans industry


TERRA ECONOMICUS, , Vol. 22 (no. 1),

The adoption of institutionalist theory derived from Thorstein Veblen is justified by its capacity to confer legitimacy to the subject in an environment where symbolic economies guide exchange intentions. In this context, the fashion industry, grappling with challenges in acquiring new clients and enhancing management performance, seeks alternatives such as brand equity to foster profound symbolic relationships between fashion brands and consumers while conferring legitimacy to the consumer. This study contributes to the comprehension of fashion consumer perception, particularly in response to symbolic stimuli, by delving into the measurement of brand equity in jeans garments. Our methodology was guided by a comprehensive literature review, enabling the construction of a survey instrument to gauge fashion consumers’ perceptions of brand equity. Subsequently, we collected a sample of 857 university students from Medellín City, Colombia. The survey results underwent exploratory factor analysis, revealing that brand equity is instrumental in comprehending market dynamics within the fashion industry. We specifically focused on neotraditional, contemporary, and exhibitionist archetypes, highlighting their significance in purchasing jeanswear. These archetypes create symbolic associations between brands and products based on status, differentiation, and market acceptance. Essential consumer variables include popularity, rebuy intent, and social responsibility. These findings hold theoretical and managerial implications, shedding light on the intricate interplay between brand equity, consumer perceptions, and symbolic aspects in the fashion industry.
Citation: Hernández-Gallego L.F., Escobar-Sierra M. (2024). Exploring brand equity assessment within consumer perception. Case of the jeans industry. Terra Economicus 22(1), 81–103. DOI: 10.18522/2073-6606-2024-22-1-81-103

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Elasticity of demand for forestry products in macro-regions of Russia: Models to forecast sector development


TERRA ECONOMICUS, , Vol. 22 (no. 1),

Forecasting the development of sectoral markets requires a comprehensive understanding of the relationship between product output and demand, both domestically and in foreign trade. This work aims to assess the demand elasticity for forestry products in Russia’s largest macro-regions, grouped according to the current administrative-territorial division into federal districts. Given the pronounced export orientation of production in the Russian timber industry, demand is modeled through production volume assuming that the market reaches partial equilibrium in the medium term. The coefficients of elasticity of demand for forest products by price and other economic parameters are estimated using quarterly data from 2010 to 2023, yielding statistically significant results. The estimates I obtained are primarily used in structural models of the Russian forest industry, with regional peculiarities taken into account. The case of sawn timber production dynamics in Siberian regions shows that the most favorable scenario for forest industry development is the outstripping growth of domestic demand for this type of product, driven by the growth of individual and multi-apartment housing construction. The implementation of these models is crucial for predicting industry development and creating a well-balanced timber industry policy. This is particularly important given the recent trade restrictions across the world.
Citation: Pyzhev A.I. (2024). Elasticity of demand for forestry products in macro-regions of Russia: Models to forecast sector development. Terra Economicus 22(1), 104–116 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-104-116
Acknowledgment: The study was funded by the Russian Science Foundation grant № 19-18-00145. https://rscf.ru/en/project/19-18-00145/

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Income distribution and economic growth in Finland: Applying Bhaduri – Marglin model


TERRA ECONOMICUS, , Vol. 22 (no. 1),

We apply Bhaduri and Marglin model to estimate the effect of income distribution on economic growth in Finland from 1975 to 2020. The Bhaduri–Marglin model is a post-Kaleckian model with the key assumption of different propensity to consume out of wages and out of profits. ARDL model is adopted to analyze the effect of profit share increase on aggregate demand components. Findings indicate that income redistribution towards profits leads to decline in economic growth due to fall in consumption, and it positively affects investments and net export due to increased international competitiveness through costs reduction; the first effect is stronger than two other effects. These results confirm the hypothesis about wage-led regime in Finland. The approach of Scandinavian countries and Finland to the role and effect of wages, for instance, differs from classical idea about the effect of wage restraint policy for increase in investments. Rise in wages is seen as a way to increase labor productivity. Since our findings indicate wage-led accumulation regime in Finland, this approach, being consistent with Bhaduri – Marglin model, seems more appropriate.
Citation: Fedoseeva T., Rozmainsky I. (2024). Income distribution and economic growth in Finland: Applying Bhaduri – Marglin model. Terra Economicus 22(1), 117–136. DOI: 10.18522/2073-6606-2024-22-1-117-136

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Sustainable organizational development and human capital in the context of soft systems methodology


TERRA ECONOMICUS, , Vol. 22 (no. 1),

As the world faces major challenges related to the climate change and geopolitical hurdles, soft systems methodology (SSM) and institutional factors offer a complex approach that might be helpful in achieving the sustainable development goals (SDGs) and are therefore gaining an increasing popularity in the research literature. By embracing the principles of SSM within the realm of institutional economics, academics and decision-makers can navigate through the complexities of real-world problems and devise effective strategies for addressing them. Understanding the intricate relationship between SSM and institutional economics offers a unique lens through which organizational performance and sustainability can be enhanced. This synergy, when explored and applied judiciously, provides a comprehensive framework that addresses not only the technical aspects of an organization but also its socio-economic dimensions. In the empirical part of the paper, a bibliometric analysis is used based on the sample of 76 documents indexed in Web of Science (WoS) database between 1995 and 2023. The network cluster analysis using the text data and the bibliometric data is employed using the VOSViewer software for network analysis. The results show that as the economic and social processes are becoming more robust, SSM and institutional economics are currently returning to the spotlight of the academic research focused on topics such as organizational performance and sustainability as well as sustainable human capital efficiency.
Citation: Strielkowski W., Kuzmin E., Suvorova A., Gorlova O. (2024). Sustainable organizational development and human capital in the context of soft systems methodology. Terra Economicus22(1), 137–150. DOI: 10.18522/2073-6606-2024-22-1-137-150
Acknowledgment: This research was supported by the Russian Science Foundation grant No. 23-28-01768.

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