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TERRA ECONOMICUS

Measure and rule: How science and government produce economic knowledge


TERRA ECONOMICUS, , Vol. 19 (no. 3),

The article explores the phenomenon of parallel existence and relatively autonomous development of two different epistemic cultures in the body of economic knowledge – academic and expert-administrative ones. Firstly, we consider how the state-knowledge-statistics nexus has been formed. This enables us to understand the role of statistics as a key link between different epistemic cultures and recognize quantification as the foundation of the cognitive style for both an economist and a state administrator. Secondly, we show how the ideal of quantitative public administration is developed in engineering practices related to the solution of large infrastructure projects of the state. At the same time quantitative facts and statistics becomes the defining condition for effective public policy. Thirdly, we trace how, against the background of the flourishing quantitative engineering practices, a counter task was shaped: building of a pure theoretical economic science, which should be fundamentally detached from practice and adapts the mathematized physics as a disciplinary paradigm. The study enables us to suggest a hypothesis that it is technocratic state administration grounded on knowledge as a key element of power`s growth that is largely responsible for the unrealistic and oversimplified nature of economics. The ontological gap with “objective reality” is in fact embedded in administrative practices. In turn, scientific economic knowledge, being incorporated in the practices of public administration, gradually loses the goals defined by scientific ethos.
Citation: Koshovets O.B. (2021). Measure and rule: How science and government produce economic knowledge. Terra Economicus 19(3): 6–19. DOI: 10.18522/2073-6606-2021-19-3-6-19

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Effectiveness of family policy in Russia: Evidence-based approach


TERRA ECONOMICUS, , Vol. 19 (no. 3),

Family policy in Russia, is based on a “narrow” demographic interpretation that neglects policy effectiveness and impact of state support on fertility indicators. This gap can be addressed using the evidence-based approach, which embraces both the influence of public policies on fertility, and human capital. The paper discusses the theoretical underpinnings of policy based on the Becker-Barreau and Baldrin-Jones concepts. We show the importance of incorporating “Big Data” into family policy analysis to address the problem of data completeness and analytical information for family policy needs. We rely on A. Sagradov’s ideas about quantitative determination of population reproduction patterns with nondemographic processes, including institutional changes and transformation of economic mechanisms of family policy. We estimated the demographic result per unit of budget expenditures in Russia (based on empirical data from EMISS and the Federal Treasury for 86 regions from 2011 to 2021, with a breakdown by months). The “random forest” method is used to identify the key factors influencing the results of the machine learning model, and to demonstrate the significance of parameters for assessing the socio-economic effectiveness of family policy in Russia. The research findings indirectly confirm the pronatalist nature of family policy in Russia, the effectiveness of which is ensured by economic mechanisms of direct cash payments to the population. The paper concludes with a discussion of the prospects for using an evidence-based approach to family policy in Russia.
Citation: Kapoguzov E.A., Chupin R.I. (2021). Effectiveness of family policy in Russia: Evidence-based approach. Terra Economicus 19(3): 20–36. DOI: 10.18522/2073-6606-2021-19-3-20-36
Acknowledgment: The article was prepared within the framework of state assignment of the Financial University under the Government of the Russian Federation, project «Family households as an economic entity».

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Paradoxes of synthesis in economics


TERRA ECONOMICUS, , Vol. 19 (no. 3),

The neoclassical synthesis of the 1940–1960s, and the new neoclassical synthesis of the 1990s, are important milestones in the development of neoclassical economics. However, after each synthesis solutions are not found to the continuously debated theoretical problems of neoclassical economics, such as weak predictive capabilities, inability to reflect the relevant social and environmental context, and solutions to the problem of the “classical dichotomy”. The reasons for the persistence of such problems, which we call paradoxes (from ancient Greek παράδοξος – unexpected, strange), have not been sufficiently studied. However, they are important for understanding the limitations and prospects for neoclassical economic theory. The paper is devoted to the analysis of these paradoxes. We highlight the general factors that influenced the results of both syntheses. Among them, firstly, the challenges of reality, secondly, the presence of new ideas and creative discussions in the scientific community, and thirdly, the preservation of the methodological categorical core of neoclassic economic theory. However, it is paradoxical that at the same the hard methodological core is a limitation on solving the problems of neoclassical theory mentioned above. Moreover, the rigidity of the methodological core significantly enhances the ideological nature of neoclassical economics, its noticeable “fixation” on micro-foundations, and the preservation of the optimization mathematics of equilibrium models. In modern conditions, which are significantly different from those existing when the methodological core of neoclassical economic theory was finally formed (mid-twentieth century), adherence to its postulates becomes a limitation on the fruitful development of orthodox economic theory.
Citation: Kirdina-Chandler S.G. (2021). Paradoxes of synthesis in economics. Terra Economicus 19(3): 37–52. DOI: 10.18522/2073-6606-2021-19-3-37-52

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Predicting the unemployment rate: Analyzing statistics on search engine query


TERRA ECONOMICUS, , Vol. 19 (no. 3),

Unemployment is one of the key macroeconomic indicators that play a significant role in the state economic policy. There is a significant variety of methods for forecasting the situation on the labor market and the unemployment rate. We show the evolution of relevant approaches, including traditional methods (labor balance model, structural changes in regional labor markets, multifactorial labor market models such as ARIMA, TAR, ARNN) and modern ones. The development and the possibility of applying innovative approaches to forecasting unemployment is associated with digitalization and the development of Internet technologies, which provide researchers with new analysis tools. When compared to traditional methods, Google search query data and other internet activity data result in better forecasts, helping to solve the problem of lagging data provided by the official statistics, and adding relevant information to analyze and predict unemployment. Based on the experience of using the statistics of search queries in predicting and nowcasting the unemployment rate, the authors developed several models for predicting the unemployment rate in Russia. The research findings show that adding multiple query variables to the autoregressive model is able to improve the predictive accuracy of the model. Superiority of the hybrid model over the autoregressive variation is due to its ability to respond to future labor market shocks.
Citation: Yurevich M.A., Akhmadeev D.R. (2021). Predicting the unemployment rate: Analyzing statistics on search engine query. Terra Economicus 19(3): 53–64. DOI: 10.18522/2073-6606-2021-19- 3-53-64
Acknowledgment: The research was carried out with the support of the Scientific Foundation of the Financial University, project “Forecasting of macroeconomic indicators based on the analysis of query statistics in search engines”.

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India-China economic cooperation – The art of balancing


TERRA ECONOMICUS, , Vol. 19 (no. 3),

India and China are the two largest states in Asia and among the most influential actors in the world. The core aspect that determined their position in the structure of international relations was their economic power. Based on the economic achievements of the two Asian giants, experts began to predict the onset of the “Asian century”, in which the center of world gravity would shift to the Asia-Pacific region, China would become a new superpower, and India – its main contender in the region. Against this background, many researchers started to pay attention to the domestic potential at regional and global levels, while bilateral relations between Delhi and Beijing were almost exclusively considered as related to geopolitics. The author deals with the bilateral economic ties and reasons that impede a mutually beneficial dialogue. A qualitative analysis has become a key research tool as it showed that today the determining source of problems are the internal imbalances of India and China, rather than their geo-economic competition, which, despite its negative impact, is still not the major factor hindering economic cooperation between the two countries. It is the solution of internal problems that activates the external trade relations of both states, but especially India, which to this day continues to be an inward-oriented economy.
Citation: Shavlay E.P. (2021). India-China economic cooperation – The art of balancing. Terra Economicus 19(3): 65–77. DOI: 10.18522/2073-6606-2021-19-3-65-77
Acknowledgment: The article is prepared within the project “Post-crisis world order: Challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

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Internationalization of SMEs: Analyzing institutional support in Germany


TERRA ECONOMICUS, , Vol. 19 (no. 3),

The author applies the New Institutional Theory to analyze the implementation of non-financial business-supporting measures (the development of organizational and institutional infrastructure) as a part of German internationalization policy. The paper shows that internationalization policy priorities are based on the need to reduce SME`s transaction costs when entering a foreign market. There are two main components of this policy: to involve SMEs in decision-making process to increase their qualitative competencies; and to stimulate priority functions of German economic agencies of business supporting. The first task is achieved through the application of the subsidiarity principle to nonprofit organizations, the development of specialized market analytical centers, and state co-financing at certain stages of the association’s existence. The second task is to promote the development of the existing organizational architecture of foreign economic activity (building an institutional system based on pre-existing relationships). Specifically, federal and state ministries involve business associations and other economic actors who already have strong ties with a majority of German companies in the foreign market in working abroad. Likewise, related programs aim at reducing transaction costs for these organizations. Such activities allow accumulating the interests of national business in foreign markets and ensuring synergy in the interaction of independent economic entities with the national representations of Germany, sciences, market research institutions, and business associations.
Citation: Ivanova A.K. (2021). Internationalization of SMEs: Analyzing institutional support in Germany. Terra Economicus 19(3): 78–92. DOI: 10.18522/2073-6606-2021-19-3-78-92

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International finance and economic institutions: Can Russian Ruble become the world’s leading currency?


TERRA ECONOMICUS, , Vol. 19 (no. 3),

Our paper focuses on the recent leading institutional trends in finance and economy of the Russian Federation. In particular, we analyze the past developments and economic crises that impacted the Russian economy and caused many adverse effects to its development. We focus on the role of economic sanctions imposed by the Western countries on the Russian economy and the outcomes of these sanctions. Then we discuss the country’s current economic and intellectual potential that constitute its valuable assets and the ways they can be monetized. We contemplate over the dependence of Russian economy on world’s oil prices and discuss whether novel information and communication technologies might take the role of oil in Russian economy. The article discusses the issue of whether Russian Ruble might become the world’s leading currency. Our findings show that under certain conditions Russian Ruble might be used as another world’s reserve currency, especially in the face of recent economic and political issues, such as Brexit or American and Chinese trade wars. We demonstrate that Russian Ruble has the potential to follow the path set by the Digital Currency Electronic Payment (DCEP), a digital currency issued by the central banks, such as, for example, the recently launched “digital yuan” (also known as the e-CNY or digital RMB) issued by the People’s Bank of China. Such a currency provides enormous opportunities for the digitalization of financial markets and changing the institutional aspects of their functioning.
Citation: Smutka L., Rovny P., Maitah K., Kotyza P. (2021). International finance and economic institutions: Can Russian Ruble become the world’s leading currency? Terra Economicus 19(3): 93–104. DOI: 10.18522/2073-6606-2021-19-3-93-104
Acknowledgment: The paper is a part of the internal research project 2021B0002, solved at the Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences in Prague

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American expansion, Russian threat and active democracy: An institutional perspective on triathlon history


TERRA ECONOMICUS, , Vol. 19 (no. 3),

The factual diarchy in triathlon, as well as the emphasis of its economic model on mass participation – all this is atypical for Olympic sports. On top of non-profit International Triathlon Union (ITU), there is also a strong economic competitor – commercial World Triathlon Corporation (WTC) owning the Ironman brand with its own independent World Championships. The reasons for this state are poorly investigated. Analysis of archival documents, memoirs, press publications, as well as interviews with the founders have allowed us to reconstruct the main stages of the socio-economic history of triathlon. The focus is on how the sports governing bodies were created in the 1980s. We also describe the social origins of the first Iron Man race and the birth of triathlon, the rivalry between Hawaii and Nice championships, and the ITU conflicts with WTC in 1990s–2000s. We argue that these conflicts are the continuation of tensions between European representatives and “American alliance” back in 1980s during the creation of the governing body. Their underlying reason is the difference in European and American models of sports. We dispute the opinion about “Russian threat”, which caused the collapse of the Union Internationale de Pentathlon Moderne, Biathlon et Triathlon (UIPMBT), plus views on the ITU development as a success story. We show that the causes of UIPMBT collapse and the earlier Triathlon Federation International collapse were due to the personal ambitions of ITU first president Les McDonald, its questionable political technique (so-called “active democracy”) and the “Alliance’s” economic interests. But in the end, McDonald’s backstage victories became Pyrrhic for ITU.
Citation: Adelfinsky A.S. (2021). American expansion, Russian threat and active democracy: An institutional perspective on triathlon history. Terra Economicus 19(3): 105–120. DOI: 10.18522/2073-6606-2021-19-3-105-120

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Measuring academic motivation


TERRA ECONOMICUS, , Vol. 19 (no. 3),

Conventional management practices in universities do not rely upon modern theories that explain the varieties of employee behavior. We generalize different theories of motivation to develop a comprehensive toolkit for measuring academic motivation. Our analysis shows that it is possible to motivate academic employees without additional financial reward. The review of literature on economic, psychological and social models of human behavior in the academic field confirms these findings. We studied the sources on the theories of professional identity, internal and external motivation, the theory of displacement and de-motivation, narrative economics, the theory of subjective well-being, as well as practical issues related to employee engagement. We propose a new approach and the system of indices for measuring various aspects of effective or ineffective employee behavior in universities. The case of the Southern Federal University (Russia) exemplifies the study of the employee motivation relying on our analytical framework. The analysis involves the factor of engagement, as well as that of the assessment of economic, social and psychological indicators of employee behavior. Our methodology makes it possible to reveal negative trends in motivating employees, identify the ways to improve academic motivation.
Citation: Mikhalkina E.V., Skachkova L.S. (2021). Measuring academic motivation. Terra Economicus 19(3): 121–134. DOI: 10.18522/2073-6606-2021-19-3-121-134

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