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TERRA ECONOMICUS

Catching-up development under sanctions: The strategy of positive collaboration


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The paper focuses on the elaboration of a long-term strategy for Russian socio-economic development. Western civilization is facing severe crisis, since mechanisms of economic and political competition outlived their efficiency. When fighting against unfavorable trends, those countries succeed that implement collaboration mechanisms in economic and political activities. The catching-up strategies of developing countries, therefore, need revising. This problem is particularly important for Russia being under international restrictions. Two alternatives are usually considered: mobilization strategy, which provides for a tightening of power, and a liberalization strategy, directed at reducing the role of the state. This paper attempts to show that the most preferable strategy is the strategy of positive (excluding activities against third parties) collaboration, aimed in the first stage at establishing the institutions of catching-up development and the reduction of inequality. As the experience of economic miracle countries shows, such a strategy makes it possible to launch rapid economic growth and to achieve high interpersonal trust and strong confidence in the state institutions. As the development succeeds, the role of government should diminish, whereas the role of market interactions might temporarily strengthen. Efforts should be directed to ensure that Russia finds itself among coordinated market economies with a significant level of corporate social responsibility and established consensus democracy. Due to growth in welfare, technological advancement, and the rise of civic culture, the strategy of positive collaboration might provide Russia with a collaborative advantage, which means joining the group of the most successful countries. In this case, a rapprochement between Russia and the EU countries seems quite plausible.
Citation: Polterovich M.V. (2023). Catching-up development under sanctions: The strategy of positive collaboration. Terra Economicus 21(3), 6–16 (in Russian). DOI: 10.18522/2073-6606-2023- 21-3-6-16

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The sovereignty of Russia in the area of pharmaceuticals: Challenges and opportunities


TERRA ECONOMICUS, , Vol. 21 (no. 3),

Pharmaceutical colonialism remains a sustained global phenomenon in the modern world, with Russia being a part of this landscape for decades. Efforts by domestically focused governments in pharmaceutically reliant nations to eliminate dependence have yielded only localized effects that lack political sustainability. Attaining the stature of “Big Pharma” corporation proves consistently elusive. Our analysis has delineated three distinct sectors within Russia’s pharmaceutical industry: the official foreign sector (54%), a private “shadow” sector that obscures owners and controllers, both domestic and foreign (43%), and state-owned enterprises (up to 3%). The industry’s regulatory framework is fractured between Russia’s Ministry of Industry and Trade and the Ministry of Health, precluding the state’s effective role as a centralized producer and client. This fragmented system is insufficient as a crisis response tool, incapable of securing pharmaceutical sovereignty over the long term, even with available resources. In response to sanctions imposed on Russia, the state apparatus employs an inertia-based model to address diminished availability of specific foreign drugs in the domestic market, thereby effectively sustaining the industry’s strategic non-competitiveness. We also examine a mobilization-based scenario for pharmaceutical industry development, oriented toward civilian and defense applications. This approach envisions a vertically integrated corporate structure, independent of ownership form, with the proposed establishment of the state entity “Rospharma” endowed with extensive authority at its core.
Citation: Gusev A.B., Yurevich M.A. (2023). The sovereignty of Russia in the area of pharmaceuticals: Challenges and opportunities. Terra Economicus 21(3), 17–31 (in Russian). DOI: 10.18522/2073- 6606-2023-21-3-17-31
Acknowledgment: The research was supported by the state assignment of the Government of the Russian Federation to the Financial University for the year 2023 on the topic “Development of recommendations for ensuring economic growth in Russia under conditions of sanction restrictions” (VTК-GZ-PI-37-23). The authors thank E.V. Balatsky for comments and suggestions on the article that helped strengthen it.

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Competition between digital currencies within the transformation of traditional monetary systems


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The article explains the fundamental difference between traditional (state) and private monetary systems, reveals the cause-and-effect relationship of macroeconomic instability of modern monetary systems, and identifies the need for radical transformation of traditional monetary systems being digitalized. We identify the features of monetary competition between digital currencies (public and private), as well as between fiat currencies in traditional monetary systems. We conclude that traditional approaches explaining the advantages of fiat money over private money are no longer valid in digital age. We argue that future monetary systems will be influences by free competition between all forms of digital currencies. This framework will dramatically reduce the number of intermediaries for transactions, provide users with greater control over their data, concentrate the movement toward higher decentralization and unified transactions. New monetary systems will enable a greater division of functions and power between traditional central banks and private business models. Due to new standards, information services and decentralized applications, the issuance and circulation of digital currencies will contribute to the interoperability of business platforms. Reduced costs related to switching among digital currencies, along with network effects, might make competition between the currencies much more real and free.
Citation: Kochergin D.A., Andryushin S.A., Sheshukova S.E. (2023). Competition between digital currencies within the transformation of traditional monetary systems. Terra Economicus 21(3), 32– 44 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-32-44
Acknowledgment: The research is supported by the Russian Science Foundation, project No. 23-28-00398, https://rscf.ru/en/project/23-28-00398/

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An institutional perspective on money circulation: The heterodox approach


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The paper aims at substantiating and applying the heterodox approach to analyze institutions related to money circulation in Russia. Orthodox economics, along with orthodox monetary theories, are usually associated with countries where the institutions of Y-matrix and market Y-economy have dominated throughout history. Russia is featured by the institutions of X-matrix and redistributive X-economy. This fact makes heterodox approach applicable to Russia, as well as to some other countries, that is confirmed by a comparison between orthodox and heterodox approaches to money circulation presented in the paper. Heterodox perspective is more practically-oriented and enables the researcher to address objectively institutions related to money circulation in terms of dynamics, uncertainty, and irreversibility. A special focus is placed on the social context associated with money circulation, including the embeddedness of relevant institutions in the system of non-economic institutions, the factor of trust, and their role in social stratification reproduction. Applying the heterodox approach combined with the institutional matrices theory, we identified the features of institutions related to money circulation in the USSR and post-Soviet Russia. In both cases, two periods of money circulation institutionalization are specified, namely, “transitional” and “stabilizing” ones. Transitional periods (New Economic Policy of the 1920s in the Soviet time and the 1990s in post-Soviet Russia) were characterized by the active implementation of Y-matrix institutions which, however, reached a critical limit. After that the stabilizing periods began, featured by the spread and dominance of updated X-matrix institutions. Our findings suggest an optimistic forecast regarding the effectiveness of emergent institutions related to money circulation in modern Russia. In this area there is a constant search for institutional balance and synthesis of dominant X-institutions and complementary Y-institutions, which did not exist in the USSR.
Citation: Kirdina-Chandler S.G. (2023). An institutional perspective on money circulation: The heterodox approach. Terra Economicus21(3), 45–57 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-45-57

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Confrontation between Russia and the Ottoman Empire in the 18th century: An institutional approach


TERRA ECONOMICUS, , Vol. 21 (no. 3),

We analyze confrontation between Russia and Ottoman Empire in the XVIII century. Our focus is on the institutional factors affecting military organization and the principles of state economic policy, in their relation to the success and failure during confrontation between Russia and Ottoman Empire. We argue that Turkey did not lag behind Russia economically until the middle of the XVIII century. In terms of naval armaments, the Ottoman Empire was also ahead of Russia until the middle of the XVIII century, since Turkey possessed more ships. Economic difficulties led the Ottoman Empire to a military and political crisis at the end of the XVIII century. We believe that the main reason for this crisis is not the economy, but the wrong strategy and the return of the Ottoman political elite to armed expansion in Eastern Europe. We link Russian foreign policy continuity in the Black Sea Region not only with the liberation of Orthodox Christian peoples of the Balkans from oppressive Turkish yoke. The influence of the alliance with Austria on the development of Russia’s military situation during the latter’s wars with the Ottoman Empire. The influence of the RussianAustrian alliance on the military position of Russia during the Russian-Turkish wars also played an important role. Before reforms implemented by Catherine the Great, the alliance with the Habsburgs was very important for Russia, since Turkey had a powerful army and navy. Fortunately for Russia, the reforms of Selim III were not of a complex character, which did not allow the Ottomans to take revenge for previous defeats.
Citation: Popov G.G., Tokmakov D.S. (2023). Confrontation between Russia and the Ottoman Empire in the 18th century: An institutional approach. Terra Economicus 21(3), 58–69 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-58-69

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Advantages and challenges to open science practices


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The article examines open science practices in relation with the Open Science framework. The core values of open science, emerged as a response to the long-standing challenges to scientific knowledge production, include: transparency, scrutiny, critique and reproducibility; equality of opportunities; responsibility, respect and accountability; collaboration, participation and inclusion; flexibility; sustainability. These are the guiding principles for open science practices. The spread of open science practices is uneven, in terms of regional, disciplinary, gender, and institutional differences. The overview of international studies shows that open science practices are beginning to affect the whole research cycle, from idea emergence throughout the dissemination and exploitation of research results. We analyzed four most widespread practices – open data, open peer review, preregistration and registered reports, and open access. Our findings suggest that all these practices, while solving particular problems, simultaneously create new ones. To overcome new challenges, shift in the principles themselves, scheme of funding and workload sharing, evaluation and reward processes are necessary. The most challenging is the need to change research culture in accordance with Open Science values. In Russia, open access is a commonly spread practice, whereas the rest three practices yet to be discussed.
Citation: Dezhina I.G. (2023). Advantages and challenges to open science practices. Terra Economicus 21(3), 70–87 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-70-87

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Occupational structure in Great Russia and Little Russia: Outline, dynamics, and peculiarities


TERRA ECONOMICUS, , Vol. 21 (no. 3),

Over the last two decades, occupational structure across urban and rural population in Russian demonstrates significant change, resulting partly from deindustrialization in employment, increase in service sector employment, and professional deskilling. In Great Russia (Russia’s largest cities), the growth in the number of managers and professionals slowed down, while the share of semi-professionals increased significantly. Smaller towns and countryside Russia, with relatively low pace of upgrading in occupational structure, are losing skilled workers, whereas the group of semi-professionals gradually grows in size. These trends smooth differentiation between various types of residence in terms of the ratio between the number of employees across local occupational groups. The specifics of employees’ position are quite pronounced at that. Across urban and countryside population, the incomes of different occupational groups appear to have somewhat leveled out over the last two decades. The reverse side of this process is the relative depreciation of labor of highly skilled persons. Additional disproportions result from the widespread practice of overworking, which is especially unfavorable in Little Russia, being aggravated by low income and population aging. Ongoing change indicates a range of internal imbalances in occupational structure in urban and rural areas, as well as systemic barriers to particular groups of employees in the Russian labor market. At times of economic crises, such a situation challenges the transition toward a new type of employee both in Great and in Little Russia.
Citation: Kolennikova N.D. (2023). Occupational structure in Great Russia and Little Russia: Outline, dynamics, and peculiarities. Terra Economicus 21(3), 88–101 (in Russian). DOI: 10.18522/2073- 6606-2023-21-3-88-101

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Russian experience with national rankings of academic journals: Mistakes, challenges, and prospects


TERRA ECONOMICUS, , Vol. 21 (no. 3),

The article considers the excessive dependence of national Russian systems of scholarly periodicals on international scientometric databases. The problem has aggravated after the owners of the global citation indexes Web of Science and Scopus left the Russian market. We find out that national performance-based academic repositories show greater stability under the influence of external challenges. We analyze Russia’s experience in compiling national lists of academic journals, using a sample of publications on economics and related disciplines. We identify and classify the most common mistakes that were made during the introduction of journal metrics into the research performance evaluation system in Russia, and propose ways to correct them. Our findings reveal that the journal selection procedure has certain flaws resulting in the fact that some leading Russian journals, recognized at the international and national level, were not included in the “white lists”. We prove that a critical flaw in the ranking procedure of the journals included in national lists consists in the mixing of quartile metrics from different international databases; consequently, the logic of the distribution of publications that are similar in academic level and status was violated. Finally, we determine crucial qualitative criteria for evaluating academic journals and, relying on these criteria, propose three categories to rank publications on national lists. Our findings can be used in the state regulation of scientific activities of individual researchers and organizations.
Citation: Tretyakova O.V. (2023). Russian experience with national rankings of academic journals: Mistakes, challenges, and prospects. Terra Economicus 21(3), 102–121 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-102-121

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The health capital of senior citizens


TERRA ECONOMICUS, , Vol. 21 (no. 3),

Current studies rarely address issues of assessing health capital and its accumulation in the context of demographic ageing and related “demographic dividends” from promoting health for senior citizens. This article aims to outline the conceptual framework for research related to the interpretation, measurement and evaluation of health capital. Empirical material for the study was extracted from Web of Science Database. We uploaded 320 papers in 2022 using key phrase “health capital”, and scanned their abstracts applying inductive content analysis. We classified approaches to the definition and interpretation of health capital. Our results suggest that the concept of health capital is not limited to human biological assets, but rather involves the indicators of society’s influence, as well as that of personal motivation and nature. These factors enable accumulating health resource throughout life-course. The findings also show that the concept of health capital relies mainly on the parameters of health system and environmental factors. Recent COVID-19 pandemic resulted in a surge of research into the labor capital health issues, but mainly from the perspective of occupational risk insurance and safety. There is a growing body of literature on cultural health capital, social institutions and infrastructure. Such studies face difficulties related to quantitative estimations. We have identified six approaches to the health capital definition: (1) the consumption of “healthy” and “unhealthy” products; (2) financing benefits from health capital from state budget; (3) the accumulation of “endogenous” human capital; (4) investment in biological assets; (5) culture-specific and lifestyle-specific consumption; (6) expenditures for environmental protection.
Citation: Rojdestvenskaya E.M., Malanina V.A., Klemasheva E.I. (2023). The health capital of senior citizens. Terra Economicus21(3), 122–132 (in Russian). DOI: 10.18522/2073-6606-2023-21-3-122-132
Acknowledgment: The study was supported by the Russian Science Foundation, project № 19-18-00300, https://rscf.ru/project/19-18-00300/

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The determinants of international reserves in developing countries


TERRA ECONOMICUS, , Vol. 21 (no. 3),

Motivated by the recent surge in international reserve holdings in developing countries, this study aims to investigate the determinants of international reserves in developing countries. Two main engaging theories were used in this study, namely, the mercantilist and precautionary views for the demand in international reserves. This study analyzed the data of 21 developing countries over the period 2003–2015 using the static linear panel method. The findings showed that mercantilist motives, such as trade value and exchange rate, are positive determinants of international reserves. As for the view from the angle of precautionary motives, an expansionary monetary policy with an increase in money supply and a decrease in the domestic interest rate will encourage higher international reserve holdings in countries. However, an increasing public debt will lower international reserve holdings. The oil shock of 2013–2015 was the biggest oil price drop in the history. The findings show oil shock will reflect the international reserves holding decrease. Some policy implications are suggested such as diversification and substitution of international reserves holdings. The cooperation between oil export countries are important to stabilizing the oil market and oil price to avoid the depletion of international reserves holdings.
Citation: Foo Y.S., Chin L., Chen К.S., Allayarov P. (2023). The determinants of international reserves in developing countries. Terra Economicus 21(3), 133–142. DOI: 10.18522/2073-6606-2023-21-3- 133-142

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