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TERRA ECONOMICUS

Factors of regional differentiation by economic growth rates


TERRA ECONOMICUS, , Vol. 18 (no. 2),

The article deals with the analysis of differences between the Russian regions in the growth rate of gross regional product from 2015 to 2018. As the author argues, the World Bank methodology of identifying and exploiting regional potential is not adapted to the analysis of regional dynamics. The article analyzes these dynamics based on Rosstat statistics on 18 indicators for 85 regions and 41 regions with a high share of manufacturing industry. A positive relationship is identified between the GRP growth rate, the dynamics of investments in fixed assets, and the average living space per person. No statistically significant relationship is identified between the GRP growth rates and the region’s orientation toward increasing exports to nonCIS countries. The degree of influence of urban and institutional factors on the GRP growth rates remains a question. The analysis of data from 85 and 41 regions shows a statistically significant inverse relationship between the GRP growth rates and the share of investments in reconstruction and modernization as a share of total investment in fixed assets. Thus, the choice between demonstrating relatively high GRP growth rates in the short and medium term and solving strategic tasks shows its relevance for the regions. The statistical models discussed in the paper include the wide range of estimated regional parameters. Despite this, the author emphasizes the need for more detailed consideration of regional specifics when looking for reserves to increase the GRP growth rates.
Citation: Dementiev, V. E. (2020). Factors of regional differentiation by economic growth rates. Terra Economicus, 18(2), 6–21. DOI: 10.18522/2073-6606-2020-18-2-6-21

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Strategic planning theory: An institutional perspective


TERRA ECONOMICUS, , Vol. 18 (no. 2),

The article elaborates on the essential elements of institutional theory of strategic planning (ITSP). This theory specifies the general institutional planning theory (IPT), previously presented by the authors. The differences between ITSP and other versions of IPT are described. As the analysis shows, most of current approaches either treat strategies as strategic plans or view strategy development as a stage of strategic planning. We suggest that the strategy development may even be an intuitive process, and methods of strategy development differ from the methods of strategic planning. From this perspective, we define strategic planning as a planning that is based on a previously developed strategy, the latter may be developed implicitly. Further, the authors apply this approach to the strategic planning in public organizations. Findings from the literature review show that planning in public organizations does not necessarily take into account spatial planning experience and differences in institutional environment among the countries. Strategic planning implementation success depends on interorganizational institutional environments. The strategy itself may become an important institution, once employees assume that they can benefit from the new relationships. Sensemaking and leadership can help in arriving at a strategic consensus. We argue that public sector reforms implemented according to the new public management philosophy have a negative impact on these processes.
Citation: Tambovtsev, V. L., Rozhdestvenskaya, I. A. (2020). Strategic planning theory: An institutional perspective. Terra Economicus, 18(2), 22–48. DOI: 10.18522/2073- 6606-2020-18-2-22-48

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Narratives and understanding of economic institutions


TERRA ECONOMICUS, , Vol. 18 (no. 2),

The increasing popularity of narrative analysis can be partly explained by ubiquity and accessibility of narratives for the economists. Important role of narratives in identifying behavioral patterns and understanding socio-economic phenomena is another feature of the narrative research. The narratives can provide valuable information for a more detailed overview of the economic development and prospective institutional change. Within the framework of the narrative economics narrative research is still not commonly associated with the institutional research. This article treats narratives as an important source of data and knowledge about relevant institutions. Narrative analysis provides a new, deeper understanding of institutions and their role in shaping social and economic interactions. Stories do not simply uncover evidence relying on the actors’ personal experiences and subjective perceptions. It can be said that the stories “wrap up” the ideas (morality) related to structuring repeated social interactions. Therefore, the narrative structure, as well as the essential elements of meaning, actually matter for explaining economic phenomena. Within the framework of this research, the narrative structure is suggested as including three elements: ideas (morality), context (historical, cultural, and social), and actor. Being closely tied to institutions, narratives can be treated as the scenarios that are consistent with outstanding events and thorough explanation of socio-economic phenomena. This research uses the narrative approach to analyze the in-depth interviews and to identify and explain the institutional traps in the field of education and science.
Citation: Volchik, V. V. (2020). Narratives and understanding of economic institutions. Terra Economicus, 18(2), 49–69. DOI: 10.18522/2073-6606-2020-18-2-49-69
Acknowledgment: This publication has been prepared in the framework of the project funded by the Russian Foundation for Basic Research (project № 18-01000581) “Institutional traps of optimization of the sphere of education and science”.

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Proof of the Invisible Hand: Why the satisficing purchase becomes optimal?


TERRA ECONOMICUS, , Vol. 18 (no. 2),

The paper develops the systematic analysis of the self-organization mechanisms of the imperfect market under price dispersion by means of the “labor-searchleisure” model. The model proves the fact that the inequality of the marginal values of search, produced by the satisficing decision, ends with the consumptionleisure corner solution where the consumer quits the market without purchase. If the consumer tries to get rid of the disappointment of the search, he exits from the corner and the first offer, which corresponds to his aspiration level, becomes satisficing as well as optimal; it equalizes the marginal values of the search and maximizes the consumption-leisure utility. The match of the satisficing and optimal buying decisions opens the door for a deeper analysis of the self-organization of the imperfect market. If the consumer evaluates correctly his purchasing power and his real wage rate before he starts to work and to search, the unit elasticity of the costs on purchase with respect to consumption automatically makes optimal any quantity purchased for the given time horizon. However, the unit elasticity rule tells nothing about the distribution of labor and search costs; it simply states the fact that this distribution is optimal and it equalizes the marginal costs of search with its marginal benefit. The act of the successful buying proves the fact that the total consumer efforts on the search and the purchase are unit elastic with respect to consumption. It means that the unit elasticity rule is followed by some inner pricing mechanism. This mechanism leads the self-interested producer to make an offer, which provides the automatic optimal consumer’s labor-search trade-off and proves in this way the hypothesis of the “invisible hand”.
Citation: Malakhov, S. (2020). Proof of the Invisible Hand: Why the satisficing purchase becomes optimal? Terra Economicus, 18(2), 70–94. DOI: 10.18522/2073-66062020-18-2-70-94

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Zhang Peigang and his contribution to development economics in the mid-twentieth century


TERRA ECONOMICUS, , Vol. 18 (no. 2),

The article focuses on the concept of economic development elaborated in the first half of the 1940s by the Chinese scholar Zhang Peigang (Chang Pei-Kang) during his studies at Harvard University. The most important feature of his doctorate thesis “Agriculture and Industrialization: The adjustments that take place as an agricultural country is industrialized” was the combination of first-hand experience of researching Chinese rural economy of the 1930s and new Western economic theories. The work differed markedly from the economic publications on the practical aspects of industrialization published in China. It was a professional study of the general patterns of industrialization in agricultural countries. Zhang Peigang justified the need for comprehensive urban and rural industrialization in backward agricultural countries. His concept helped to overcome the one-sided interpretation of industrialization as the development of industry to the detriment of agriculture. Published in English in the USA, Zhang Peigang’s book was noticed by foreign academics. The article identifies and summarizes ten book reviews in English and Spanish published in scholarly periodicals in 1949–1951. These reviews were written by economists, experts in agriculture, sociologists, cultural scholars, historians. Many reviewers noted that Zhang Peigang gave too much prominence to the presentation of Western economic ideas and paid insufficient attention to the problems of industrialization in China. Zhang Peigang’s concept took into consideration the impact of China’s specific institutional structure upon the economic growth. In contemporary China the demand for the normative theory of “development economics with Chinese characteristics for the new era” can turn into powerful incentive to fuel interest in the contribution of the Chinese scholars of the last century in this discipline.
Citation: Borokh, O. N. (2020). Zhang Peigang and his contribution to development economics in the mid-twentieth century. Terra Economicus, 18(2), 95–116. DOI: 10.18522/2073-6606-2020-18-2-95-116

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Economic benefits of tourism: Cultural identity and tourism destinations in the Czech Republic


TERRA ECONOMICUS, , Vol. 18 (no. 2),

Our paper focuses on the economic benefit of tourism by evaluating the compliance between the destination identity and the identity of residents on the example of a selected tourist area. One can see that the identity of the destination is reflected in the product offer and can be found in media messages. The identity of residents was ascertained by a survey. Our research is divided into three main parts. The first part of the research included an analysis of the destination offer within the website and Facebook page. The second part of the research is focused on the analysis of the tourism destination in the media. These two methods are used to analyse the identity of the destination. A group interview was chosen to analyse the identity of residents. The third research was carried out using the focus group method. Our methodical procedure is tested on a case study of a selected destination Toulava (a Czech tourist area located on the border of South and Central Bohemia), however it is designed to be universally usable within tourism destinations. Our results confirmed that the model-defined path for memory destination selection by destination management and its use in the business offer to create product cores works. The high degree of product authenticity has been confirmed. The applied research methodology enabled to obtain relevant outputs. It is not common in general practice that the identity of the destination is examined together with the identity of its residents. The three methods used in this article are less demanding in terms of capacity and cost than the quota sample research. Research can thus be carried out in destinations repeatedly and follow time series.
Citation: Tyslová, I., Abrhám, J., Horváthová, Z., Rubáček, F. (2020). Economic benefits of tourism: Cultural identity and tourism destinations in the Czech Republic. Terra Economicus, 18(2), 139–154. DOI: 10.18522/2073-6606-2020-18-2-139-154
Acknowledgment: This paper is the result of Metropolitan University Prague research project no. 74-03 «Public administration, legal disciplines and industrial property» (2020) based on a grant from the Institutional Fund for the Long-term Strategic Development of Research Organisations.

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Labor capacity building in Russian regions: Effects of regional differentiation


TERRA ECONOMICUS, , Vol. 18 (no. 2),

Goals like harmonizing the interests of economic and social progress, focusing on national and regional balanced economic growth, achieving social stability and a decent standard of living of the population relate to the labor capacity building. A set of negative tendencies which characterize the asymmetry of economic development, the differences among the regions, including deepening staff differentiation, the structural imbalances can slow down economic growth. The mechanisms for regulating regional development do not provide the necessary efficiency in overcoming the polarization processes. The aim of the paper is to identify regional imbalances in the labor capacity building in the regions of the Russian Federation, taking into account interregional differentiations. The authors also focus on establishing the extent of unevenness of, and the overall picture of personnel differentiation among the Russian regions. This article explains the labour capacity for all of the Russian regions, the degree of heterogeneity of its development, and emerging personnel risks and threats, and the factors for ensuring the personnel security of the regions. The paper also emphasizes the analysis of existing differences among the regions, the ability to ensure the processes of building, reproducing and using the labor capacity. The development factors of labour potential from the economic and statistical perspectives are presented, relying on modified integral model to respond to the private indices of labour capacity development and their combination. The dynamics for the private indices is presented, along with the dynamics for the integrated assessment over the past 10 years for all subjects of the Russian Federation. The elements of differentiation for the Russian regions are identified, according to the qualitative characteristics of the level of development of labour capacity. A systematic picture of the existing structure of personnel differentiation of Russian regions is presented, in order to observe trends and issues in ensuring personnel security in different regions according to their socioeconomic development differences.
Citation: Simionescu, M., Krivokora, E., Fursov, V., Astakhova, E. (2020). Labor capacity building in Russian regions: Effects of regional differentiation. Terra Economicus, 18(2), 117–138. DOI: 10.18522/2073-6606-2020-18-2-117-138
Acknowledgment: This paper was supported by a grant from the Russian Foundation for Basic Research, project No. 18-010-00732 A.

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From Clovis to Macron: A Russian view of the social and economic history of France (Review of Alexander Khudokormov’s textbook, Social and Economic History of France )



TERRA ECONOMICUS, , Vol. 18 (no. 2),
Acknowledgment: The article was prepared with the support of the Grant of the President of the Russian Federation for the Young Scientists (Research Project № MD59.2019.6).

This article covers the main ideas of the new textbook, Socio-Economic History of France, written by the renowned Russian scholar Alexander G. Khudokormov (the head of the department of economic history and history of economic thought of the Lomonosov Moscow State University). We think that the most interesting points of the Khudokormov’s textbook are the following. 1. The breadth of the historical panorama – in the textbook, the social and economic history of France is considered from the time of the “Lex Salica” to the “yellow vests” riots. 2. Consideration of socioeconomic history of France from a comparative perspective. Throughout the work, Khudokormov demonstrates how different features of French economic history were reflected in Russia. In our opinion, such an approach can immune students from applying one-size-fits models and create an awareness of the importance of studying the institutional properties of different countries. 3. The textbook is written in a very beautiful language using lots of references to the details of French everyday life and literary works. This style, at first glance, is no longer fashionable in the era of increasing formalization of economic history, but we believe that it is on the major advantages of Khudokormov’s textbook. Thanks to this manner of presenting material, students will better understand France’s fascinating history and realize the need to take into account cultural and institutional contexts in the development of economic policy.
Citation: Maltsev, A. A., Nenovsky, N. N. (2020). From Clovis to Macron: A Russian view of the social and economic history of France (Review of Alexander Khudokormov’s textbook, So c i a l and Economic History of France ). Terra Economicus, 18(2), 155–164. DOI: 10.18522/2073-6606-2020-18-2-155-164

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