Victor M. POLTEROVICH
Doct. Sci. (Econ.), Principal Researcher, Central Economics and Mathematics Institute of the Russian Academy of Sciences (CEMI RAS); Deputy Director, The Moscow School of Economics of the Lomonosov Moscow State University (MSE MSU), Moscow, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 6-27
DOI: 10.18522/2073-6606-2020-18-1-6-27

The reform of the project activity state system (PASS) carried out in Russia in 2018–2019 is analyzed on the basis of its comparison with the system of institutions of catching-up development (ICD). The expediency of ICD implementation in modern conditions is confirmed by the experience of Malaysia and Tatarstan. Relying on the IСD system, Malaysia has been able to achieve rapid economic growth, reduce inequality and make significant strides in diversifying production. Due to a system of indicative planning and consolidation of elites, Tatarstan has become one of the most successful regions in Russia. The PASS that has been built to date, like the ICD system, brings the task of forming and selecting large-scale projects outside ministries and creates an institutional framework for indicative planning. The next task is to define more precisely the order of interactions between project offices, expert councils of different levels, private companies, and to develop a methodology for drawing up forecasts and plans of development indicators. Civil society and trade union representatives should be involved in these activities. Functions of PASS should be expanded, it is necessary to replenish the list of national projects. Largescale projects should be aimed at borrowing more advanced technologies, creating new value chains and diversifying the Russian economy. The government faces the task of promoting inter-regional and intercompany technology exchange. The «Science» project should be substantially redesigned, and a project on improving the national innovation system should be developed. It should include a system of sectorial research institutes as intermediaries between academic science and the research units of large firms. Ultimately, a Federal Agency for Development with broad credentials should be created, a system of rolling indicative planning should be formed, and all economic policies should be harmonized with the objectives of the plans.

Citation: Polterovich, V. M. (2020). Reform of the project activity state system, 2018– 2019. Terra Economicus, 18(1), 6–27. DOI: 10.18522/2073-6606-2020-18-1-6-27

Andrei VERNIKOV
Doct. Sci. (Econ.), Senior Researcher, Institute of Economics, Russian Academy of Sciences, Moscow, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 28-42
DOI: 10.18522/2073-6606-2020-18-1-28-42

This paper places the institution of bank deposit protection in the context of government paternalism. I apply the theories of deposit insurance, merit goods, patronized goods, government paternalism, and institutional change to the analysis of the Russian case. The paper relies on statistical data from the Central Bank of Russia, Deposit Insurance Agency, and Rosstat. The findings are five-fold: (1) There is similarity between theoretical justification for government paternalism and intervention in household savings and the humanitarian sphere; (2) Deposit protection fits well the Russian institutional setup, due to its paternalistic nature; (3) The public choice-driven purpose of government intervention in household savings may change in the process. Patronage of small savers becomes camouflage for protection of private banks; (4) Deposit guarantee redistributes wealth from the public sector to the private one; (5) Deposit guarantee hinders the evolution of the market discipline and responsibility while fostering opportunistic behavior patterns among depositors and banks. The research implication of the paper is that, in the absence of strict eligibility criteria for merit goods, one can identify goods and services that probably do not belong there but sneak into that category by means of a manipulated public choice and thus get similar treatment with traditional humanitarian sectors. The policy implication is that the authorities might wish to tackle opportunistic behavior at source, i.e. by amending the parameters of the deposit insurance scheme.

Citation: Vernikov, A. (2020). Deposit protection in a paternalistic state: The Russian case. Terra Economicus, 18(1), 28–42. DOI: 10.18522/2073-6606-2020-18-1-28-42

Evgeny V. BALATSKY
Doct. Sci. (Econ.), Professor, Head, Macroeconomic Regulation Center, Financial University under the Government of the Russian Federation, Principal Research Scientist, Central Economic Mathematical Institute of the Russian Academy of Sciences, Moscow, Russian Federation

Maksim A. YUREVICH
Research Fellow, Financial University under the Government of the Russian Federation, Moscow, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 43-57
DOI: 10.18522/2073-6606-2020-18-1-43-57

The article focuses on a simple model of economic growth: a modification of the fixed capital accumulation equation. Besides, we introduce the traditional assumption that labor productivity is a power-based production function of capital strength. The model has shown that the growth of capital intensity, which identifies technological progress, does not automatically lead to the stimulation of economic growth. For such incentives, a rather strict condition must be met, which is that the power parameter θ in the production function must be greater than one; otherwise, technological progress, paradoxically, constrains economic growth. The presence of the condition θ > 1 is called the technological effect of scale since in this case, and there is a wide replication of new technologies, which leads to an accelerated increase in labor productivity. An econometric check of the presence of this condition for several countries showed that it was not obvious. As it turned out, only Russia, Canada, the United States, and France had a technological scale effect; the other sample countries – Japan, Italy, Australia, and the United Kingdom – had the opposite condition: θ < 1. To explain the scale effect, the authors put forward the hypothesis that there are two drivers of development – industrial and territorial. An industry driver is a cluster of high-tech industries (such as aircraft manufacturing and nuclear power) that are generated by enterprises with high productivity. The territorial driver assumes a vast territory of the country, which allows replicating the products of the industry driver widely. The idea is put forward that Russia has a significant economic advantage due to its technological economies of scale, which creates objective conditions for the effective implementation of high technologies.

Citation: Balatsky, E. V., Yurevich, M. A. (2020). Technological economies of scale and economic growth. Terra Economicus, 18(1), 43–57. DOI: 10.18522/2073-6606-2020-18-1-43-57

Ivan V. ROZMAINSKY
Cand. Sci. (Econ.), Associate Professor, St. Petersburg School of Economics and Management, National Research University Higher School of Economics; Faculty of Liberal Arts and Sciences at Saint Petersburg State University, Saint Petersburg, Russian Federation

Victoria A. OSIPOVA
Internet Marketing Manager, Web Video Marketing, Saint Petersburg, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 58-80
DOI: 10.18522/2073-6606-2020-18-1-58-80

The paper examines the concept of health capital alongside the phenomenon of positive and negative investments in it. Neoclassical economic theory implies individuals always act rationally, making their choice solely for reasons of prudence and considering the consequences of their actions. Since health capital is treated as a standalone type of capital, a rational individual would invest in health benefits and refuse to invest in benefits destructively affecting him or her in order to maximize the number of days during which he or she would be able to use human capital and receive financial income accordingly. Nonetheless, according to the observations, individuals tend to act differently. The goal of the study is to identify how both animal spirits and investor myopia affect the fact that individuals are investing negatively in their own health capital. The paper relies on surveys of HSE students in St. Petersburg, Russia. By using the econometric analysis of smoking as an example of negative investment in health capital, the study states how to find an explanation for one of the mysteries of social life in post-Soviet countries: the average life expectancy of Russians, extremely low (especially regarding men), even by the standards of underdeveloped countries. The main result is that the propensity to smoke is affected by animal spirits, but not by investor myopia.

Citation: Rozmainsky, I. V., Osipova, V. A. (2020). Economic analysis of smoking as a negative investment in health capital. Terra Economicus, 18(1), 58–80. DOI: 10.18522/20736606-2020-18-1-58-80

Olga A. NIKOLAYCHUK
Doct. Sci. (Econ.), Professor, Financial University under the Government of the Russian Federation, Moscow, Russian Federation

Rustem M. NUREEV
Doct. Sci. (Econ.), Professor, Financial University under the Government of the Russian Federation, Chief Researcher, Institute of Economics, RAS, Moscow, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 81-101
DOI: 10.18522/2073-6606-2020-18-1-81-101

The paper deals with household savings and investment functions. The institutional features of the household economy in the world economy are presented in terms of their place and role in the national economies. The specific household investment activities are analyzed in the context of strategic financial choices. Household activities imply a choice between various behavioral imperatives. The search for appropriate areas to invest temporarily free cash in order to meet household needs influences this choice. The significance of a system of contributing institutions is shown to facilitate these processes. As the authors argue, the economy should encourage the system of institutions, favorable for stimulating the household investment activities. It appears crucial to stimulate household investments in various economic assets. This study presents a comparative analysis of the Russian, Kazakh, Belarusian, Armenian, Kyrgyz, and American household investment activities. Worldwide experience shows that similar tendencies occur, which characterize households investment activities in different countries. The authors identified the differences in household living standards, incomes and investments among the countries. As the research findings suggest, low-income households prefer risk-free investments. Recommendations are made on improving institutional instruments to stimulate households to choose a predominant financial strategy of saving.

Citation: Nikolaychuk, O. A., Nureev, R. M. (2020). Household savings and investment. Terra Economicus, 18(1), 81–101. DOI: 10.18522/2073-6606-2020-18-1-81-101

Timur R. GAREEV
Cand. Sci. (Econ.), Skolkovo Institute of Science and Technology, Moscow, Russian Federation

Natalya A. ELISEEVA
Cand. Sci. (Phys.-Math.), Associate Professor, Kaliningrad State Technical University, Kaliningrad, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 102-120
DOI: 10.18522/2073-6606-2020-18-1-102-120

This study is inspired by a terminological collision, which can be expressed by the following question: if institutions are the «rules of the game», how do they relate to game theory? We admit that most researchers who have applied a gametheoretic approach in the context of institutional problems do not explicitly define «institution» within a simulated game. So it is not always clear what are the «rules of the game» in the specific game setting? The article aims to consider existing approaches to understanding and modelling institutions by various schools of institutionalism relying on the game theory formalism. As the starting point, we consider two limiting cases among the existing approaches, namely, institutions are presented as games themselves and as equilibria in the games. We pay special attention to the understanding of the institutions as game equilibria, but also analyze such approaches to institutions as game forms, correlation devices, information systems, and so on. Given the multifaceted nature of game theory, we focus on those types of game settings that may be useful for understanding institutional change, i.e., for modelling endogenous institutions. We treat endogenous institutions as subsystems in repeated games. We also compare two programs for modelling institutional change – the evolutionary-institutional approach to the institutions that regulate cooperation in the context of social dilemmas, as well as the modern political economy approach based on the commitment problem in the games with political power. A review of the requirements for game-theoretic formulation needed to model institutional change completes the study.

Citation: Gareev, T. R., Eliseeva, N. A. (2020). Institutions and institutional change in the context of game theory. Terra Economicus, 18(1), 102–120. DOI: 10.18522/2073-66062020-18-1-102-120

Inna K. SHEVCHENKO
Doct. Sci. (Econ.), Acting Rector, Southern Federal University, Rostov-on-Don, Russian Federation

Yuliya V. RAZVADOVSKAYA
Cand. Sci. (Econ.), Leading Researcher, Research Center «Instrumental, Mathematical and Intellectual Support of Economy», Southern Federal University, Rostov-on-Don, Russian Federation

Ekaterina V. KAPLYUK
Cand. Sci. (Econ.), Senior Researcher, Research Center «Instrumental, Mathematical and Intellectual Support of Economy», Southern Federal University, Rostov-on-Don, Russian Federation

Kristina S. RUDNEVA
Junior Researcher, Research Center «Instrumental, Mathematical and Intellectual Support of Economy», Southern Federal University, Rostov-on-Don, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 121-139
DOI: 10.18522/2073-6606-2020-18-1-121-139

The article deals with the dynamic capabilities viewed as a specific resource of the company, through which an organization achieves its competitive advantage. This advantage is achieved due to the effective combination and recombination of existing tangible and intangible resources. The second significant factor is the ability to quickly reconfigure the internal environment to adapt to rapidly changing external conditions. The authors focus on recent approaches to determine the role of dynamic capabilities within the strategic management framework. The authors identify the resource perspective, the process perspective, and the design perspective on dynamic capabilities. As the authors suggest, given the increasing scarcity of resources, dynamic capabilities become an essential source of competitive advantages. Unique organizational abilities make it possible to obtain economic rent in similar conditions. The study reveals that the crisis phenomena, including the 2008 global financial crisis, have triggered research interest in dynamic capabilities. As the research findings suggest, after 2008, the resource perspective usually dominates when studying the dynamic capabilities. A questionnaire is designed to assess the dynamic capabilities of business enterprises. The survey resulted in responses from 96 large, mediun and small businesses in high-technology sectors. In conclusion, criteria for assessing the dynamic capabilities of the economic activities of enterprises are identified.

Citation: Shevchenko, I. K., Razvadovskaya, Y. V., Kaplyuk, E. V., Rudneva, K. S. (2020). Developing indicators for assessing the dynamic capabilities of industrial enterprises. Terra Economicus, 18(1), 121–139. DOI: 10.18522/2073-6606-2020-18-1-121-139

Anton I. PYZHEV
Cand. Sci. (Econ.), Associate Professor, Siberian Federal University, Krasnoyarsk, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 140-153
DOI: 10.18522/2073-6606-2020-18-1-140-153

Despite the growing discussion of the problems of the economy of climate change, there is a lack of empirical research on the possible effects of global warming on natural resource management. This problem is especially important for Russia, rich in natural and land resources but showing significant research gap in related fields. In this article, the author focuses on the effects of a gradually changing climate on the logging volume, taking into account the spatial differentiation of the Russian regions. The statistics of logging in the regions of Russia (RSFSR) and the corresponding meteorological information are both available for the period from 1946 to 1992. The analysis of causality relies on the well-known Granger test with Toda – Yamamoto procedure. As the research findings show, the global trends of gradual increase in air temperature in the regions concerned coincide with the global trends. However, despite this fact, there is no reason to consider this effect as the reason for the increase in the logging volume in the observed period. Similar results were obtained for precipitation. Two facts can explain this conclusion: a) in the period under review there was a significant growth in the total volume of logging, which was determined by high rates of growth of the entire Soviet economy but was not limited to the state of the resource base of the industry; b) the beginning of temperature changes had to be about the middle of the period and did not have time to have a significant impact on the state of the resource base of the industry.

Citation: Pyzhev, A. I. (2020). Global climate change and logging volumes in Siberian regions from 1946 to 1992. Terra Economicus, 18(1), 140–153. DOI: 10.18522/2073-66062020-18-1-140-153

Acknowledgement: The research was funded by a grant from the Russian Science Foundation (project no. 19-18-00145), “Modeling of the mutual impact of climate change processes and the development of the forestry economy: case-study of Siberian regions”.

Grigoriy I. KHANIN
Doct. Sci. (Econ.), Professor, Leading Researcher, The Russian Presidential Academy of National Economy and Public Administration (RANEPA), Siberian Institute of Management, Novosibirsk, Russian Federation

TERRA ECONOMICUS, 2020, Vol. 18 (no. 1),

p. 154-166
DOI: 10.18522/2073-6606-2020-18-1-154-166

The author analyses the studies of the role of the military sector in the Soviet economy conducted in the USA after World War II. The paper shows that nearly all American Sovietologists significantly underestimated the Soviet military sector. To explain this fact, the author describes the state of the entire Soviet studies in the USA, mostly funded by the American government. In addition to this big mistake of American specialists, the author also emphasizes another serious error in evaluation of the fixed assets – an essential underlying factor for economic growth. There were also other severe mistakes in economic calculations. Nevertheless, American Sovietologists have considerable merits for alternative estimates of the Soviet economy. The author demonstrates that the best estimates of the military sector in the Soviet economy were given by independent researchers – immigrants from the USSR who were often discriminated in the US academic circles. At the same time, their forced emigration is indicative of the shortsightedness of the Soviet internal policy, depriving the USSR of its talented people. Raising this issue brings the author to a question about the causes of such errors. These causes are related to the place of Sovietology in American economic science, its progress, scholars’ motivation as well as the behavior of the American government. Failures of Western economists to predict the 2008 crisis coupled with such failures of economic Sovietology allow us to talk about a crisis of the entire Western economics and higher economic education. Meanwhile, after 1991, Western economics has set the pattern for Russian economic science and higher economic education.

Citation: Khanin, G. I. (2020). The Soviet military sector in American studies: Оmitting the obvious (Kontorovich, V. (2019). Reluctant Cold Warriors. Economists and National Security. Oxford University Press. The Book Review). Terra Economicus, 18(1), 154–166. DOI: 10.18522/2073-6606-2020-18-1-154-166