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TERRA ECONOMICUS

Education reforms and precariatization of school teachers

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The school reform is associated with the new professional standards for teachers. Being a teacher in Russia is becoming a less-respected profession. This paper discusses the reasons for the growing precariatization of teachers. Emergence of precariat in school education is associated with the implementation of the ideas of New Public Management (NPM). Proponents of the new managerialism in education tend to perceive the teacher as an actor providing educational services; the quality of these services can be and should be measured by indicators and targets. The reverse side of this emphasis on performance indicators in education is the destruction of social values and institutions inherent in educational organizations and activities. Using empirical data (survey questionnaires as well as in-depth interviews with the school teachers from Moscow and Rostov-on-Don, Russia), the article discusses the factors of precarity. Russian teachers are facing with the following issues: erosion of guarantees of stable employment; fall of the prestige of the profession; increase in the workload without adequate growth in labor remuneration; increasing bureaucratization and regulation of their professional activities. The teachers spend more time at work, far from the pedagogical practice, thereby not developing and even worsening her or his pedagogical competence. When choosing a profession, teachers are often guided by non-material motives, therefore they note the dominant influence on their motivation for value factors. However, the processes of precarization in the teacher’s environment in the future can lead to a decrease in professionalism, the quality of teaching and further dilution of professional identity. When planning and implementing reforms in the sphere of school education, it is necessary to take into account evolutionary institutions and social values.

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Economic globalization and its impacts on clustering

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The purpose of this study is to review globalization literature and cluster literature to see how these two phenomena are understood, which perspective scholars refer to when analysing globalization and clusters, how can the approaches explain each other. The attention was focused more on the outcomes of globalization for the countries that are a part of the ongoing proccess rather than theoretical aspects, while cluster literature was chosen to address globalization and the attempt was to see the links between these phenomena. Bibliometrical analysis is used for the purpose, articles selected from the Emerald Insight database. The findings suggest that the main concern caused by globalization is inequality of income and wage which can be reduced by education for people can gain skills and knowledge which would make them competitive in demanding environment. Competitiveness is emphasized in cluster definition and the processes of globalization are seen as advantageous for cluster development. This literature review needs further analysis with more articles taken into consideration. The concept is advanced and developed, so there are many studies made regarding this topic. In this paper a certain aspect is observed to see how far the concept has advanced and how scholars view it.

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Interaction between China and the Russian regions in the area of direct investment and foreign trade

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The purpose of this study was to examine the influence of some factors on the inflow of foreign direct investment (FDI) from China to the Russian regions and their econometric estimation, the construction of a model of foreign trade of the Russian regions with China, and the econometric modeling of the impact of inflows of Chinese FDI on the foreign trade of the Russian regions and China. The methodology of the study. To achieve the purpose, on the one hand, models of independent multiple regressions were used, taking into account (models with fixed and random effects) and not taking into account (the combined regression model) a panel data structure. On the other hand, for the purpose of modeling the interdependence of investment and trade contacts between the regions of Russia and China, the apparatus of systems of econometric equations, namely the system of recursive and simultaneous equations, was used. Research findings. The findings have revealed that the Chinese investors are not interested in the resource endowment of the regions of Russia when localizing FDI. In addition, FDI flows from China are directed to the nearby regions of Russia. It was proved that Chinese partners conduct the most intensive trade with nearby and highly profitable (resource-rich) regions of the Russian Federation. The study also demonstrated the absence of a statistically significant relationship between the flows of FDI from China to the regions of Russia and the volumes of trade between the relevant regions with the China. In other words, China invests and trades with nearby regions of Russia, but divides them into two aggregates – for the purposes of trade and direct investment. Application of the results. These results determine the future direction of the scientific efforts in the analysis and modeling of the approaches of individual countries or group of countries in the implementation of FDI in the regions of Russia. It will help the governments of the Russian regions to promote the balanced and appropriate investment policy.

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Russian Federation and People’s Republic of China: similarities and distinctions in the fiscal relations between central and regional authorities

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The paper compares legal foundations as well as practices of intergovernmental fiscal relations between central and regional authorities in the Russian Federation and in the People’s Republic of China. The relevance of such cross-country comparative analysis follows from the huge importance of intergovernmental fiscal relations now in both countries. Equally faced with the challenges of mitigating regional disparities, of developing lagging regions without prejudice to regions driving economic growth, of creating incentives for regional authorities to develop their own revenue sources, Russia and China currently adhere to rather different approaches to solving these problems. Meanwhile, in terms of many indicators of socio-economic development, such as per capita parameters of budgets, Russian and Chinese regions are quite similar. With this in mind, some elements of the Chinese practice of intergovernmental fiscal relations and of the organization of the budget system in general can be of interest for the Russian Federation. They can be viewed as examples of good practice, the effectiveness of which is confirmed by higher rates of socio-economic development, which People’s Republic of China demonstrates for many years. Notwithstanding certain constitutional restrictions related to the federal nature of the Russian state, it can be argued that some elements of the Chinese model can at least be seen as possible strategic alternatives when choosing ways of improving or reforming Russian budget system. The centralization of revenues along with the radical decentralization of expenditures is probably the most interesting specific feature of the Chinese budgetary system; it appears to be a possible solution to ensure the commitment of subnational governments to regional development while maintaining the instruments of control over them by central authorities.

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Theory and practice of the Ordnungspolitik in the social market economy in Germany

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The first post-war decades for West Germany were marked by a rapid economic recovery, which, despite the devastating catastrophe of the Second World War and the ensuing split of the state, quickly returned the country to the number of highly developed industrial nations of the world. The monetary and economic reforms carried out in 1948 made it possible not only to lay the foundations of monetary and financial stability, to increase incentives for the growth of entrepreneurial activity and labor productivity, but also to create conditions for carrying out the economic policy (Ordnungspolitik) of the Social market economy. Based on the idea of building a free, efficient and at the same time socially fair market system, the concept of a Social market economy succeeded in filling the institutional vacuum of the post-war period, gaining wide recognition of German voters and becoming the fundamental constituent element of the social and economic system of Germany. Thanks to the high GDP growth rates achieved in the 1950s and 1960s, the Western Germans were able to quickly overcome post-war disruption, cope with unemployment, substantially raise the standard of living of broad sections of the population and ensure a high level of economic, social and political stability in the long term. The authors analyze the formation of the ideational foundations of the Social market economy in Germany – a concept which theoretical framework is based on various streams of socio-economic and legal thought. First, we will draw the attention on the fundamental principles of German ordoliberal economic thought, principles that directly influenced the formation of the doctrine of a new social and economic system in post-war West Germany. After that, we will highlight the most important aspects that define the social foundation of a Social market economy – the concept of a policy of order in the first decades of the existence of the Federal Republic of Germany. Then we will transfer these reflections to the modern theory of order in order to determine the place and role of social policy in the current socio-economic system of the Federal Republic. In conclusion, some propositions concerning the importance of the policy of order in the structure of modern economic science will be formulated.

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The effect of Piketty: a comment to new concept

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The article deals with the effect of inequality of Piketty, which is treated by the author of the effect as the third fundamental law of capitalism. In the paper, a brief review of the critical works of Western authors on the law of Piketty is given; the author shows that in Russian scientific discourse the new concept has not been adequately highlighted and developed. The author emphasizes the thesis that the law of Piketty should be more accurate to demonstrate the effect of Piketty, rule of Piketty, or principle of inequality of Piketty, which more precisely reflects the essence of the analytical construction and not diminishes the merits of the author of the concept. Attention is drawn to the fact that unlike the first two laws of capitalism, written by Piketty in the «strong» form (i.e. in form of strict equality), his third law expressed in the «weak» form (i.e., in the form of inequality), which demonstrates a «gap» in a common methodological agenda of research. The article provides the generalization of the inequality of Piketty by constructing a simple model of economic growth, which implies equality, including the effect of Piketty. The resulting equality allows to determine the condition under which the effect of Piketty is performed automatically. The paper demonstrates that the effect of Piketty is an investment one by its nature, and the return of capital and the rate of economic growth change always synchronously. This means that cuts in the profitability of the capital will automatically entail a decrease in the rate of economic growth. Thus, the internal contradictions of the observed effect and the ambiguity of its implications for the regulation of the process of capital accumulation are obvious. Experimental calculations allowed to demonstrate that the large gap between return on capital and rate of economic growth by itself does not lead to increased social inequality. The author discusses the issue of over-accumulation of capital in the context of new phenomena of our time – the attempts to introduce the «robot tax» and the unconditional basic income.

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Russia’s magnates in the second half of the 1990s and in 2000s

TERRA ECONOMICUS, , Vol. 15 (no. 2),

Performance of Russian capital magnates in the post-Soviet period is analyzed. The 20 richest people of Russia are regarded magnates. Their performance is reviewed with breakdown by particular stages of the post-Soviet economic history. A connection of the magnate origin with privatization and loans-forshares auctions is emphasized. The sectoral profile of the companies controlled by magnates is shown. Changes in the magnate composition and their shifting in the Forbes magnate ranking are outlined in detail. The role of relationships with the authorities as well as business skills for the magnate position is highlighted. Performance nuances of the magnates who gained the first place in the Forbes ranking are characterized. The trends in the overall scope of the magnates’ wealth and their determinant factors are explained against the general state of Russian economy, the situation in the global economy and the level of world prices for primary commodities. The estimates of Russian magnates’ wealth are verified. The role of magnates in developing Russian economy is evaluated. The one-sidedness of an adverse judgment on their performance is disproved as not accounting for the special features of the Soviet and post-Soviet society and the economy. Before 2000, with numerous abuses of particular magnates, professional activities of most of them ensured, however, that the large manufacturing companies continued their existence in Russia’s industries. This positive aspect of the magnates’ companies operation became more evident during in 2001–2003. Mikhail Khodorkovsky’s activities are emphasized in this context. The author indicates both positive role of magnates from 2004 to 2007 in supporting the economic growth, and wastefulness of spendings among many of them. Between 2007 and 2015, the influence of affinity to the government had increased in magnates’ companies’ performance indicators.

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Interdisciplinary research in socio-economic and humanitarian fields: is the sum of the single-sided figures a multi-faceted one?

TERRA ECONOMICUS, , Vol. 15 (no. 2),

The trend towards globalization demonstrates a one-vector approach to more or less significant trends in modern society. In the field of science, globalization has generated the phenomenon of "interdisciplinarity", which marks a qualitative leap in the production, processing and appropriation of social knowledge. Interdisciplinarity is associated with the era of the domination of creative knowledge. There are ongoing discussions on the subject and methodology of social science, on incorporation of mathematical and psychological techniques into social knowledge; interdisciplinarity emphasizes a number of new issues at that. The newest American, European, Japanese, Chinese sciences are represented today by inter-branch structures – the future dominant form of sociology. The main cause is that social problems are by their nature always interdisciplinary ones. Much attention is paid in this article to the contradictory consequences of the division of labor in the sphere of science. Interdisciplinarity is interpreted not only as an epistemological, but also as an ontological category, which requires finding the objective structures adequate to the “interdisciplinary” nature. Integration of various branches of social knowledge is transformed for social science into a kind of a pass into the “knowledge economy”. Today, the development of an interdisciplinary approach in Russian social science is constrained by three points: 1. Interdisciplinarity does not cancel, but makes the objective subordination of various branches of social knowledge more important. Established by the great social scientists of the XIX century, the priority of economic knowledge remains valid for two centuries. This means that the theoretical and methodological basis for all interdisciplinary social studies can only come from the methodological and theoretical achievements of economics. 2. Interdisciplinarity is usually interpreted as a phenomenon of cognition. But for the interdisciplinarity as such, the main question is, whether there is something in the objective social reality that can be understood only in the framework of an interdisciplinary approach? If this is so, then objective and reasonable grounds exist for the interdisciplinary approaches. 3. For a long historical period, the Russian society had no an opportunity to develop in a natural way, because the dominant ideology artificially narrowed the scope of available alternatives. Under these conditions, social processes are beginning to deform, and retrograde social dynamics occur. Therefore, the issue of the possibility and fruitfulness of applying an interdisciplinary approach to deformed social processes becomes particularly important.

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