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Regular version of the site
Master 2019/2020

Business and State in Russia

Type: Compulsory course (Russian Studies)
Area of studies: Political Science
When: 1 year, 3, 4 module
Mode of studies: offline
Master’s programme: Российские исследования
Language: English
ECTS credits: 5

Course Syllabus

Abstract

The course is intended to provide students with overall understanding of state-business relations in Russia during last three decades. Using reach set of relevant empirical studies we will show main stages in the evolution of strategies of different market agents in their interaction with state in Russia. Special attention will be paid to the impact of economic crises of 1998, 2008-9 and 2014-15 on behavior of economic actors and incentives of state actors to cooperation with business. We will analyze evolution of state-business relations using new institutional economics approach and especially limited access order framework elaborated in last books of Douglass North and his co-authors.
Learning Objectives

Learning Objectives

  • To provide an overview of state-business relations in Russia, it’s special features and transformation throughout the economic crises of 1998, 2008-2009 and 2014-2015.
  • To provide knowledge of basic concepts and research on state-business relations in Russia.
  • Advance student’s skills of working with social and economic databases.
Expected Learning Outcomes

Expected Learning Outcomes

  • Have an overall understanding of state-business relations features and development in Russia during last three decades
  • Have competences to understand and analyze the factors influencing the model of business-state relations in Russia within the framework of different research approaches
  • Advance the skills of working with social and economic databases applicable to the student’s own research
Course Contents

Course Contents

  • Introduction
    • Business–Government Relations: Theory In this lecture departing from mainstream economic literature we will show the main reasons for business demand for regulation and will discuss the risks of state capture and costs of corruption using empirical data on transition economies. After that we will discuss alternative approach proposed by the scholars of industrial policy focusing on the role of governments in the promotion of their national firms in global value chains. Finally third approach to the analysis of state-business relations based on limited access orders framework will be presented. Also description of course structure and main databases available for students will be provided.
  • Business and state relations in Russian economy of the 1990s
    • Russian transition from plan to market, mass privatization and incentives of state-owned and privatized enterprises. • Behavior of de novo firms under weak government and forms and scale of tax evasion of 1990s • Shuttle trade as economic and social phenomena and its impact on entrepreneurial activity • Violent entrepreneurship of 1990s We will discuss specific distortions inherited by Russia from Soviet plan economy and their consequences for behavior strategies of different types of economic actors: state-owned enterprises, privatized companies, de novo private firms as well as individual entrepreneurs. We will explain the phenomena of non-payments, barter exchanges and monetary surrogates, which were typical for the sector of state-owned and privatized firms in Russia in mid and late 1990s. We will show the links between weakness of government and large-scale tax evasion in private sector. Special attention will be paid to the phenomenon of “violent entrepreneurship”, when bandits due to extreme weakness of state started to execute state functions such as security protection and resolution of commercial disputes. We will discuss the activity of violence-managing agencies — criminal groups, private security services, private protection companies etc., their rules and values, as well as outcomes for Russian economy.
  • Economic recovery of early and mid- 2000s
    • Micro-level explanation of fast recovery of Russian economy in early 2000s • Sectoral success stories: the cases of car assembly, IT-industry and agriculture • Rent sources, the conflict between oligarchs and top-level bureaucracy and the reasons of shift from state capture to business capture in mid 2000s • Violent pressure of state actors on business in 2000s We will define the main factors responsible for institutional improvement of early 2000s and providing conditions for economic growth. We will show why balance of interest between key elite groups was broken in 2003-2004 and will discuss long-term consequences of conflict between oligarchs and top-level federal bureaucracy focusing on the problem of violence. We will consider the specifics of such a phenomenon as corporate raiding and discuss opportunities to protect against it.
  • Business and State relations in Russia after global financial crisis 2008-2009
    • Costs and benefits of doing business in Russia before and after global financial crisis of 2008-2009, demand for improvement of business climate in Russia and the role of business associations • Sub-national competition for the investment and regional success stories: cases of Kaluga, Belgorod, Voronezh and Tatarstan. • Attempts to limit violent pressure of state actors on business in 2010s and the reasons for the failure of this policy • Foreign business and evolution of its interactions with Russian government • Increasing contradictions in economic policy after 2012 and their influence on enterprises behavior • In the search for new model of development: “militant Russia”, geopolitical “Shift to the East” and dominant expectation in the business. We will analyze the policy of modernization proposed by Dmitry Medvedev in 2009 and the reason of its failure. We will consider incentives for collective action in Russian business community and interactions of peak business associations with government. Special attention will be paid to the National entrepreneurial initiative, Agency for Strategic Initiatives and attempts to improve investment climate in Russia. We will discuss the main forms of collective action of foreign business operating in Russia, main mechanisms of interaction with Russian authorities that are available for foreign firms. We will also analyze the evolution of foreign business and state interaction in Russia starting from 1990s and discuss the impact foreign firms and its activity had on the improvement of Russian business climate. We will consider the reasons of geopolitical tensions between Russia and the West and their consequences for economic policy, firms’ behavior and models of state-business relations. From this perspective we will discuss the prospects of Russia’s “Shift to the East”, including the Far East development initiatives and attraction of East Asian business partners. Cases of Russian interaction with Japan and China will be applied to show the balance of political and economic aspects of decision-making in this area. In the conclusion we will discuss the impact of political decisions on the strategies of economic agents, their expectations and investment activity and will show the importance of common vision of future for successful implementation of economic policy.
Assessment Elements

Assessment Elements

  • non-blocking Active participation
  • non-blocking Project presentation
  • non-blocking Project text
  • non-blocking Exam
    The exam will be conducted orally (based on the course materials). The exam will be held via ZOOM platform (https://zoom.us/j/99530702817). The students should join the conference according to the exam timetable that will be sent to the group e-mail prior to the exam. Student’s computer should meet the following requirements: working camera and microphone, Zoom program should be installed. To participate in exam students should: join the conference according to exam schedule, switch the camera and microphone on during the answer. Students are going to have 30 min. each to prepare for oral answer and make a written resume/ plan of the answer, which should be sent to the teacher via Zoom chat before the oral answer. A short-term connection failure during the exam is a connection failure in less than a minute. A long-term connection failure is a communication failure in 15 minutes and more. In case of a long-term connection failure the student cannot continue to participate in the exam. The exam can be retaken orally by under the same procedure. Экзамен проводится в устной форме (вопросы по материалам курса). Экзамен проводится на платформе ZOOM (https://zoom.us/j/99530702817). К экзамену необходимо подключиться согласно расписанию ответов, высланному преподавателем на групповую почту студентов накануне экзамена. Компьютер студента должен удовлетворять требованиям: наличие рабочей камеры и микрофона, установлена программа ZOOM. Для участия в экзамене студент обязан: присоединиться к экзамену согласно точному расписанию, при ответе включить камеру и микрофон. На подготовку к ответу на вопросы отводится 30 минут, в течение которых студент должен составить конспект/план устного ответа и прислать его преподавателям через чат конференции до устного ответа. Кратковременным нарушением связи во время экзамена считается нарушение связи менее минуты. Долговременным нарушением связи во время экзамена считается нарушение 15 минут и более. При долговременном нарушении связи студент не может продолжить участие в экзамене. Процедура пересдачи проводится в устной форме аналогично процедуре сдачи.
Interim Assessment

Interim Assessment

  • Interim assessment (4 module)
    0.4 * Active participation + 0.3 * Exam + 0.15 * Project presentation + 0.15 * Project text
Bibliography

Bibliography

Recommended Core Bibliography

  • Firestone, T. (2008). Criminal Corporate Raiding in Russia. International Lawyer, 42(4), 1207–1229. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=asn&AN=38602842
  • Michael Rochlitz. (2012). Corporate Raiding and the Role of the State in Russia. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.DDC4E1FE
  • Roland, G. (DE-588)128859016, (DE-576)165921293. (2000). Transition and economics : politics, markets, and firms / Gérard Roland. Cambridge, Mass. [u.a.]: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edswao&AN=edswao.087415372

Recommended Additional Bibliography

  • Andrei Yakovlev. (2000). Barter in the Russian Economy: Classifications and Implications (Evidence from Case Study Analyses). Post-Communist Economies, (3), 279. https://doi.org/10.1080/14631370050173405
  • Andrei Yakovlev. (2001). “Black Cash” Tax Evasion in Russia: Its Forms, Incentives and Consequences at Firm Level. Europe-Asia Studies, (1), 33. https://doi.org/10.1080/09668130125520
  • Andrei Yakovlev. (2004). Evolution of corporate governance in Russia: government policy vs. real incentives of economic agents. Post-Communist Economies, (4), 387. https://doi.org/10.1080/1463137042000309520
  • Doner Richard F., & Schneider Ben Ross. (2000). Business Associations and Economic Development: Why Some Associations Contribute More Than Others. Business and Politics, (3), 1. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.bpj.buspol.v2y2000i3n1
  • Duvanova, D. (2013). Building Business in Post-Communist Russia, Eastern Europe, and Eurasia : Collective Goods, Selective Incentives, and Predatory States. Cambridge: Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=508367
  • Frye, T., Yakovlev, A., & Yasin, Y. (2009). The “Other” Russian Economy: How Everyday Firms View the Rules of the Game in Russia. Social Research, 76(1), 29–54. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=asn&AN=44123177
  • KAZUN, A. (2015). Violent Corporate Raiding in Russia: Preconditions and Protective Factors. Demokratizatsiya, 23(4), 459–484. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=asn&AN=111151399
  • North, D. C., Wallis, J. J., & Weingast, B. R. (2013). Violence and Social Orders. Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.cup.cbooks.9781107646995
  • Shleifer, A. (DE-576)164178708. (2005). A normal country : Russia after communism / Andrei Shleifer. Cambridge, Mass. [u.a.]: Harvard Univ. Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edswao&AN=edswao.117144606