Oktay MAMEDOV
Doctor of Economics (DSc), Professor, Southern Federal University, Rostov-on-Don, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 6-25
DOI: 10.18522/2073-6606-2016-14-2-6-25

The research article provides a new critical insight on the arguments for one of the most influential brain attacks of our time against the market economy – by trying to legitimate an idea of usefulness of “macroeconomic planning” for the market economy. Being in fact a “Trojan horse” in the market environment, such kind of ideas has a long prehistory (including the Keynesian theory of macroeconomic equilibrium and Hitler’s practice of regulation to overcome the post-war crisis in Germany). However, the attack which is the point of criticism in this article, illustrates the “best traditions” of “economic imperialism”. The solutions proposed in the paper are of high relevance, since they refer to the new evidence the authors of the criticized article provide to justify the idea of macroeconomic planning. The purpose of the paper is to demonstrate methodological and practical incompatibility of the concepts of centralized planning and free market, irrespective of particular change that take place in these two systems. The objectives of the article are: to provide rationale for using monographic method of critical analysis when appropriate; to provide characteristics for the political and economic evidence this paper appeals to; to study conceptual context of interrelationships between society and economy; to demonstrate the role of the bureaucracy in an attempt to resurrect macroeconomic planning in the market economy. Methodology used in the article: correct juxtaposition between the political and economic imperatives of macroeconomic planning and those of the market system. Limitations of the study: the analysis presented in the paper is bounded by the theoretical modelling of the initial premises, mechanisms of its implementation, and forecasts of its probable consequences in market and non-market economy. The texts of the authors of the criticized “planned market economy” concept, as well as the results of theoretical and methodological studies by foreign and Russian political economists served as the sources of data.

Rustem NUREEV
Doctor of Economics, Professor, Head of the Department of Economics, Financial University under the Government of the Russian Federation, Tenured Professor of the National Research University Higher School of Economics, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 26-47
DOI: 10.18522/2073-6606-2016-14-2-26-47

The article is devoted to developing countries trying to escape from the world of poverty and misery, which began after the Second World War. In the work «The Great Escape: Health, Wealth, and the Origins of Inequality» (2013) A. Deaton notes that over the past 250 years, mankind has made great strides in the development of public health and welfare of people. Although it did not reduced, and often widened the gap between developed and developing countries, the latter, according to Deaton, have all chances to break the cycle of disease and poverty. Anyway, two largest countries – China and India made the great strides and achieved real progress on this path. Not all countries have managed to achieve such significant success. However, their progress depends primarily on their own efforts. Therefore, the author believes that it is not financial aid to poor countries which guarantees success, but elimination of customs obstacles, entry/residencepermits for migrant workers, and creation of tropical medicines, which do not bring back high profit to pharmaceutical companies. The problem of income inequality and consumption is one of the main focuses for the Nobel laureate in economics in 2015 A. Deaton. In his monographs «Understanding Consumption» (1992) and «The Analysis of Household Surveys: A Microeconometric Approach to Development Policy» (1997), A. Deaton examines the relationship between the total expenditure of economic agents and the nutritional value of foods consumed, to evaluate how effectively the poor, the rich and the middle class spend their budgets in order to cover their need for calories necessary for life. In Deaton’s work «Data and Dogma: The Great Indian Poverty Debate» (2005) the author emphasizes the importance of independent statistical research for a sober assessment of the success of economic reforms in the country – in particular, measures to combat poverty. In India, where the number of poor is in the hundreds of millions, the government isexcessively optimistic suggesting in its official reports that the authorities effectively solve this problem. A. Deaton became famous in 2010 thanks to his study conducted in cooperation with the American psychologist Daniel Kahneman, «High Income Improves Evaluation of Live but Not Emotional Well-Being» (2010). Scientists have wondered,«How much people need for happiness?». Having interviewed 450 thousand Americans, they received a very interesting result: for a man to safelyendure various kinds of life troubles, at least $75 000 a year is a sufficient level of earnings. If the income level is lower, then the troubles are perceived more emotionally. However, with further increase of welfare, level of satisfaction with life does not change. Big money do not add happiness.

Evgeny V. BALATSKY
Doctor of Economics (DSc), Professor, Director of Macroeconomic Research Center, Financial University under the Government of Russian Federation, Leading Staff Scientist at Central Economics and Mathematics Institute of Russian Academy of Sciences (CEMI RAS), Moscow, Russia

Natalia A. EKIMOVA
PhD in Economics, Associate Professor, Leading Staff Scientist at Financial University under the Government of Russian Federation, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 48-69
DOI: 10.18522/2073-6606-2016-14-2-48-69

The article presents an approach for estimating the equilibrium prices of macrofactors – labor, capital and institutions. For this purpose production-institutional functions are introduced, linking produced net income with these three factors. A special indicator resulting from the multiplication of life expectancy and the Gini index serves as the criterion of institutional efficiency. Thus, the components of the indicator allows to take into account two properties of institutions including provision of basic guarantees and fundamental freedoms, with the number of employed people taken as the characteristic of labor, and investment in fixed assets – as the characteristic of capital. Econometric analysis has confirmed relevance of causal relationships based on the production-institutional functions for Russia, the USA and the UK. Such a generic three-factor model allows one to classify the possible modes of distribution of income. Calculations have shown that in the U.S. and UK a stable oligarchic model of income distribution has developed, with the income distribution in favor of capital. In Russia, this model has changed in the last decade toward the state-oligarchic type, with the income distribution in favor of capital and state. We introduce the notion of disequilibrium of the economy, representing the amount of price distortions for three macro-factors. Econometric parabolic functions are built for the three countries, showing dependency between economic growth rate and the indicator of disequilibrium. These functions enabled us to examine the relationship between economic equilibrium and production optimum, as well as to demonstrate how they actually may not align. The links between the notion of equilibrium and social justice, on the one hand, and between the optimum and economic efficiency, on the other hand, are uncovered. The issue of the «equitable» taxation depending on the institutional efficiency achieved is addressed.

Gennady M. SOKOLOV
PhD (Economics) Candidate, Institute of Economics of Russian Academy of Sciences, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 70-89
DOI: 10.18522/2073-6606-2016-14-2-70-89

The paper presents an evolutionary-institutional approach to study the models of land relations found in Russia, India and the United States. The inquiry employs the Institutional Matrices Theory (IMT), also known as X&Y Theory. This approach is based on the idea that at least two types of economies – X and Y – exist. An X-economy is understood as an economy dominated by supreme conditional property, as well as redistributive and cooperative institutions. Contrarily, the Y-economy characterizes economic systems with a dominance of private property, with the institutions of buying and selling, as well as competition, as the prevalent institutions. Moreover, IMT approach also emphasizes the importance of economic processes in their historical context, as well as the natural and climatic factors affecting the countries. This inquiry seeks to establish a balance between the legal norms and rules regulating land relations that occur in each of the selected countries and their correspondence to either X or Y type. Qualitative content analysis of land regulation practices within historical contexts is carried out. A comparison between different institutional mechanisms for each of the selected countries is made. The paper demonstrates practical significance of evolutionary-institutional approach and its explanatory power required for understanding and assessing specific traits of land relations that could characterize different countries, and may prove useful for making policy decisions.

Alexandr ERMOLENKO
Doctor of Economics (DSc), Professor, Southern Institute of Management, Krasnodar, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 90-99
DOI: 10.18522/2073-6606-2016-14-2-90-99

Moscow Economic Forum (MEF-2016, end of March, 2016) had discussion on the intriguing theme of search for new ideas of development of the Russian economy, with the national idea as the main focus. Such orientation of scientific search makes it reasonable to turn to cognitive potential of Lev Gumilev’s theory of passionarity. Its potential is being developed in many directions of modern social science. Application of method of the theory of passionarity shows its relevance for the Russian economic science, in particular, for the process of collective search for new ideas which could help to renovate the archaic structure of Russian economy. The author justifies legitimacy, relevance and necessity of application of methodological tools of the theory of passionarity for the analysis of creative potential of the Russian ethnos at the current life cycle phase. Application of these tools can provide efficiency of search for the new ideas of Russian economic development, and result in a denial of various clichés which may mislead the scientific search. At the same time, today such application is limited because of the methodological abilities of research participants, due to decline in politicaleconomy level of analytical culture. Special attention is paid by the author to the interdisciplinary character of search for the new ideas of Russian economic development, with the emphasis on complex approach, involving: context analysis, detailed historical description of the economic system, clearness of the research in terms of its object, conceptual integrity, effective combining of strengths of different scientific approaches, as well as assessment of feasibility of the new developmental ideas. The author seeks the real assessment of potential of development that the Russian ethnos possesses at the inertia phase of its life cycle.

Wadim STRIELKOWSKI
PhD in Economics, Energy Policy Research Group, University of Cambridge, United Kingdom

Evgeny LISIN
PhD in Economics, Associate Professor of the Department of Economics in Power Engineering and Industry, National Research University “Moscow Power Engineering Institute”, Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 100-108
DOI: 10.18522/2073-6606-2016-14-2-100-109

Soaring electricity prices constitute a serious obstacle for both small and large business enterprises, since the costs of electricity are projected into the market prices of their goods and services. This paper analyzes the current conditions and offers some measures for optimization by the means of the parametric model that describes the conditions of power purchase agreements (PPA) for different groups of consumers with different demand profiles. We use the case study of PPAs contracts in Moscow, the Russian capital, in order to model the optimal power supply for three hypothetical customers: a meat factory, a car wash, and an office unit. We employ a Heaviside step unit function in order to model the consumer demand and to calculate the gains for various types of consumers. Our results demonstrate that consumers with higher energy consumption are better off when moving to across tariff zones changing the value of the contract. Moreover, it appears that changes into the investment policy of the hypothetical Russian enterprise enable it to lower the costs of energy and thence to increase the competitiveness of its good and services offered on the market. Our results might also be important in the context of the recent focus on the renewable energy and low-carbon future.

Denis KADOCHNIKOV
PhD in Economics, Associate Professor, St. Petersburg State University; Senior Research Fellow of the International Centre for Social and Economic Research – Leontief Centre, St. Petersburg, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 109-126
DOI: 10.18522/2073-6606-2016-14-2-109-126

China’s budgetary system, including intergovernmental fiscal relations, has been actively evolving for several decades in the context of the nation’s socio-economic reforms. The country has been steadily moving from a rigid centralized system to a system with elements of fiscal federalism. This paper describesthe movementofChina from the highly centralized budget system, in which it was impossible to speak about any significant fiscal autonomy of sub-national governments,to experimentswithfiscal autonomy of the regions and with the organization of intergovernmental fiscal relations, and finally to the adoption of the foundations of the current tax and budget legislation. Turning to the present situation, the paper documents main characteristics of the system of intergovernmental fiscal relations during the last two decades, its problems and development trends, and possible lessons for Russia. When analyzing the relations between the center and the provinces it is possible to observe a differentiated approach to the three groups of regions (cities under the central government, national autonomies and other regions), which is of interest from the point of view of improvement of the Russian system of intergovernmental budgetary relations. Current situation with subnational finances in China is the result of a series of experiments and for all its ambiguity is indicative of certain achievements in terms of providing incentives for subnational governments to expand the revenue base and in terms of the efficiency of the policy of budget transfers.

Lyudmila MATVEEVA
Doctor of Economics, Professor, Southern Federal University, Rostov-on-Don, Russia

Olga CHERNOVA
Doctor of Economics, Professor, Southern Federal University, Rostov-on-Don, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 127-138
DOI: 10.18522/2073-6606-2016-14-2-127-138

In the current context, which is defined by most researchers, both Russian and foreign, as the “new normality”, new approaches emerge to ensure modernization-related growth of the national economy andto improve its competitive position in the world markets. Russia’s economic orientation for recent years made it dependent on oil and resulted in deindustrialization of the economy, degradation of high-tech industries and high dependence on foreign sources of modernization development. Today the issue of a new system of priorities related to transition to a model of non-oil development is of increasing importance for Russia. Russian policy of import substitution has shifted in its approach from protectionism to an offensive policy and expansion of domestic industrial products to world markets. Therefore, there is an urgent need not only for change in economic incentives, but for institutional transformation which can promote industrial modernization.The article examines the key elements for effective policy of import substitution in Russia entering «new normality». As the authors put it, heterogeneity of the institutional environment of Russian regions impedes implementation of industrial modernization reforms. As a result, a number of economic barriersaccompanied with pseudo market institutionsemerge.Coherence between political, ideological and economic institutions is identified as the precondition for effectiveness of the policy of competitive import substitution. The degree of state intervention in import substitution and competitiveness of a branch of industry are taken as the main factors which determine the type of a scenario for import substitution policy.The conclusion was drawn that it is reasonable to implement a competitive scenario of import substitution, to provide a maximum of multiplicative effects in the current context of the “new normality”.

Sergey M. PYASTOLOV
Doctor of Economics (DSc), Professor, Institute of Scientific Information on Social Sciences of the Russian Academy of Sciences (INION RAS), Moscow, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 139-158
DOI: 10.18522/2073-6606-2016-14-2-139-158

The paper presents a review of key publications on Transdisciplinarity (TD), the science and the methodology which active contemporary development is caused by growth of human activity in planetary scales (challenges of the Anthropocen). The review has revealed an eclectic enough collection of projects and new structures created mainly for the task of solving of problems of modern socio-economic development and integrative/transdisciplinary education. At the same time, some concrete projects of development of organizational forms and examples of convergence of socially demanded knowledge, appear rather actual. The paper mainly considers the sources that describe the following TD aspects: genesis (from antiquity up to now; conflicts and struggle of interests), ontology (Levels of Reality, their relations with levels of TD), epistemology (criteria of truth, the types of logic, new modes of education), political economy (a science as a form of public work organization) and ethical appliances (a «regulating ideal» thematic, ethical aspects of scientific research). Following the results of the review the author concludes that TD, presumably, is ready to support that direction of socio-economic, civilizational developments which will be supported by resources of stakeholders. The spectrum of possible basic methodological assumptions of the chosen direction can be wide enough: from «moist robot» to «builder of the lucid future with strong spirit». TD does not aspire to create a general theoretical structure, but, appeals of a wider reflexivity, including – «humility», openness for interaction with others methodologies and experts, contextualization of one’s own knowledge and readiness to give way to other approaches if they are more adequate to modern challenges.

Vyacheslav VOLCHIK
Doctor of Economics, Professor, Southern Federal University, Rostov-on-Don, Russia

Oxana POSUKHOVA
PhD in Sociology, Associate Professor, Southern Federal University, Rostov-on-Don, Russia

TERRA ECONOMICUS, 2016, Vol. 14 (no. 2),

p. 159-173
DOI: 10.18522/2073-6606-2016-14-2-159-173

Precarity has become a significant feature of our society. This paper focuses on the problem of precariatization from an institutional perspective which emphasizes factors of institutional transformation, technological change and influence of regulative mechanisms. Education is viewed as the important institution affecting labour market. Increased duration of education is a sign of modern social orders. In developed countries, higher education is becoming increasingly accessible to the majority of young people; as a result, a shift occurs from its professional orientation towards general cultural training. Disequilibrium, or redundancy of young people with higher education in the labour market, cannot be investigated irrespective of the social context – first of all, processes of socialization and building of civil society. Institutions are inertial by its very nature, and this inertia is much more strong than those immanent to the regulation mechanisms. As a result, an asynchrony takes place between institutional change and change in regulation mechanisms. This asynchrony can be viewed from the Veblen’s dichotomy perspective. New quality of institutions, along with their non-complementarity to the regulation mechanisms, have much to do with the instability and lack of social guarantees which are the features of precariat as the new modern social class. The response of society to the swift changes that take place in material and social technologies is addressed in the context of the new Luddites movement. Rapid institutional changes are discussed in the context of professional identity, emergence of new professions and forms of employment. “The trap of precarity” could become further resistant to change and hard to break away from, due to misalignment between the employees’ expectations and perceptions regarding their career prospects, on the one hand, and existing regulative mechanisms and social technologies, on the other hand.