The Economics of Russian Transition

Publication date
Saturday, 19.04.2003

V. Mau, Ye. Gaidar, S. Sinelnikov, A. Ulyukaev, G. Trofimov, S. Arkhipov, S. Batkibekov, S. Drobyshevsky, M. Dombrovsky, A. Radygin, N. Shmeleva, I. Doronin, A. Zakharov, E. Serova, I. Rozhdestvenskaya, S. Shishkin, I. Starodubrovskaya, Yu. Bobylev, E. Gavrilenkov, O. Izryadnova, N. Volovik, N. Leonova, S. Prikhodko, N. Smirnov, I. Kolosnitsin, B. Granville, O. Dynnikova, G. Shapiro, T. Koval, O. Lugovoy, E. Shkrebela, S. Fischer



The end of the Cold War saw an unprecedented number of countries changing economic policies at the same time. One result has been the emergence of a new field of economics, postcommunist transformation theory. Written by prominent Russian analysts, the essays in this book discuss the economic policy problems that confront postcommunist countries. Most chapters focus on liberalization of the exchange rate and trade system, macroeconomic stabilization, and institutional reform. They also look at various policy options that have been pursued and their results. Underlying the book is the assumption that the transition to a market economy is both irreversible and the best path to sustained growth in Russia.



Part I. Preconditions for the post-communist transformation

Chapter 1. On the inevitability of the demise of socialist economy

1.1 Stability of the socialist economic system
1.2 Peculiarities of the socialist model of economic development
1.3 Internal constraints for a long-term development of economic system
1.4 On the possibility of socialist economic reform

Chapter 2. Logic and nature of economic crisis in the USSR

2.1 Reforms during the period of late socialism
2.2 Ideology and reform programme
2.3 Modernisation of economic mechanism as a practical task
2.4 Economic crisis as a power crisis

Chapter 3. Programme of the liberal market-oriented reforms

3.1 The scope of disagreements
3.2 Discussion of the methods of implementation of financial stabilisation
3.3 Social and economic outlook on the eve of reforms
3.4 The need to promote the reform process
3.5 Russia approaching economic independence
3.6 The essence of social and economic transformations of the transition period in Russia

Part II. Macroeconomic processes and economic policy of post-communist Russia. Main stages

Chapter 4. General macroeconomic problems of the post-socialist transition in Russia

4.1 Financial links and their role in the analysis of transition economy
4.2 Inevitability of the economic reforms in Russia
4.3 Price liberalisation: shock measure in the system of gradual reform
4.4 Political constraints and a put-off stabilisation
4.5 Unorthodox variant of the orthodox stabilisation
4.6 Fiscal crisis
4.7 Conditions and factors of economic growth

Chapter 5. Macroeconomic stabilisation as social and political problem

5.1 Factors of a put-off stabilisation
5.2 Consolidations of the parties: pro-inflation supporters against anti-inflation ones
5.3 Shift in the balance of forces
5.4 Constitutional problems of macroeconomic stabilisation

Chapter 6. Macroeconomic problems during economic liberalisation (1992)

6.1 Tight budgetary policy during the liquidation of the monetary shed
6.2 Strengthening of populism and softening of financial policy
6.3 Monetary policy in 1992
6.4 Attempts at changing financial strategy with uncoordinated movements between the Government and the Central Bank
6.5 Reconstruction of public revenues and expenditures

Chapter 7. Formation of preconditions for the financial stabilisation

7.1 Influence of political factors on the state of public finance
7.2 Monetary policy in 1993
7.3 Reduction in budgetary obligations after 1993 constitutional crisis
7.4 Reconstruction of 1993 budget
7.5 Slowing down of the pace of transformations in financial sphere: "moderately tight" policy
7.6 Certain peculiarities of 1994 budget crisis
7.7 Reconstruction of 1994 budget
7.8 Aim at the tight financial policy
7.9 Monetary policy in 1994

Chapter 8. Financial stabilisation in Russia

8.1 Political preconditions for financial stabilisation
8.2 Monetary programme for 1995
8.3 Budgetary policy during the period of financial stabilisation
8.4 Tightening of monetary policy and inflationary inertia
8.5 The role of currency policy in achieving stabilisation
8.6 Increase in the real rouble value
8.7 Crisis in the inter-bank market

Chapter 9. Interdependence of the macroeconomic stabilisation and political processes. The year of Presidential elections in Russia

9.1 Political uncertainty and the economy
9.2 Macroeconomic problems of the 1996 election campaign
9.3 Government economic policy during the uncertainty of the election period
9.4 Economic policy after the presidential elections
9.5 The phenomena of the postponed growth

Chapter 10. Macroeconomic stabilisation and the fiscal crisis

10.1 Political and economic outlook: new "window of opportunities"
10.2 Main aspects of government actions and the reaction of the legislative power
10.3 Public finance
10.4 Reconstruction of the 1997 budget
10.5 Monetary policy
10.6 Increase of the new threat of the reform policy crisis
10.7 Currency and stock market overview

Chapter 11. Fiscal problems: Russia in the context of the international experience in the post-communist stabilisation

11.1 The legacy of the command economy
11.2 The first attempts at stabilisation
11.3 Further fiscal adaptation in the countries of Central Europe and the Baltic states
11.4 Central Europe: the trap set be the post-socialist social state
11.5 Fiscal outlook in the countries lagging behind in the implementation of reforms
11.6 Anatomy of the Bulgarian crisis
11.7 Conclusion

Part III. Institutional Reforms in Russian Economy

Chapter 12. Russian privatisation as a process for the formation of the institutional basis of economic reforms

12.1 Ideas, stages and results of privatisation
12.2 Privatisation models in transition economies: comparative characteristic
12.3 Russian privatisation model: the stage of non-economic transfer new ownership rights
12.4 Specificity of the money privatisation (post-voucher)
12.5 The policy of the government and the banks towards pawned stocks of a number of big enterprises
12.6 New phase in the property redistribution
12.7 Property structure and the interests of the stockholders in the context of residual sales

Chapter 13. Some institutional problems in the post-privatised development of Russian corporations

13.1 Efficiency of the privatised enterprises and the problems of management of publicly owned shares
13.2 Industrial-financial groups
13.3 Formation of the model of corporate governance
13.4 Institutional aspects of the development of corporate shares market, financial intermediaries

Chapter 14. Russian banks in transition period

14.1 Peculiarities of the emerging contemporary banking system in Russia
14.2 Capital concentration in the banking sector
14.3 Functions of Russia's commercial banks
14.4 Commercial banks and the real sector of the economy
14.5 The problems of reliability of Russia's banking system
14.6 Monetary instruments for regulating banks liquidity
14.7 Emerging system of regulation and control of banking activity
14.8 International aspect of the problem of stability of Russia's banking system

Chapter 15. Institutional reforms in agro-industrial complex

15.1 The need for the agrarian reform and its main tasks
15.2 Specifics of the agrarian reform in the countries with the different type of the economy
15.3 Institutional reform in agriculture
15.4 Institutional reforms in the market and food processing system (3rd sphere of AIC)
15.5 Formation of the credit system in agriculture
15.6 Formation of the state support system of agriculture
15.7 Reform of the foreign trade regulation of AIC

Chapter 16. Institutional reforms in social and cultural sphere

16.1 The need for reforms in the branches of social and cultural sphere
16.2 State and the groups of special interests in social and cultural sphere
16.3 Transition from the budget to insurance medicine: ideology and aims of the reform in health care
16.4 Practical introduction of the new system of financing health care
16.5 Checking of the reforms. Attempts at restoring the state system of health care
16.6 Institutional changes in the sphere of education
16.7 Institutional changes in the sphere of culture
16.8 Shadow privatisation in the social sphere
16.9 Commercial activity of entities in the social and culture sphere
16.10 Evolution of social and culture branches during the reform years
16.11 Directions for the necessary transformations

Chapter 17. Housing reform: features and consequences of the chosen model

17.1 General characteristic of the housing system in the Soviet period
17.2 Concept of the housing reform
17.3 Results of the housing reform in 1994-1997
17.4 New stage of the reform: what are the prospects?

Part IV. Crisis in the real sector of the economy

Chapter 18. General phenomena in the development of the real sector in the reform period

18.1 Main trends of development and factors of economic restructuring
18.2 Production of GDP and its use
18.3 Restructuring of the real sector of the economy
18.4 Investment process in the period of market-oriented reforms

Chapter 19. Branch peculiarities in the development of the real sector

19.1 Branches of industry during the period of market-oriented reforms
19.2 Agrarian production in the reform years

Chapter 20. Foreign economic activity in the period of market-oriented reforms

20.1 Liberalisation of foreign trade: results and prospects
20.2 Consequences of the policy of foreign trade preferences and privileges
20.3 Goods structure of Russia's foreign trade

Part V. Social costs of the reforms

Chapter 21. Some trends in the evolution of the labour market

21.1 Unrealised forecasts
21.2 Uncomplete employment: objective data and subjective interpretation
21.3 Indices of the registered labour market
21.4 Regional labour markets
21.5 Migration of labour: branch and regional aspects
21.6 Financing of the employment policy

Chapter 22. Population's income during the period of economic reforms

22.1 Social and economic differentiation of Russia's population in 1992-1997
22.2 Shift in the poverty line
22.3 Influence of the inflation on the nominal household income: inflation and poverty
22.5 Annex

Part VI. Economic reform and dynamics of the public opinion (1991-1997)

Chapter 23. First stage of economic reforms (1991-1993)

23.1 Start of liberal reforms
23.2 Influence of price liberalisation on the consumer market
23.3 Vouchers
23.4 Attitude towards private property and privatisation
23.5 From the April referendum to October events in 1993.
Evolution of the attitude towards economic reform and power

Chapter 24. Main trends in the attitude of the population towards
market transformations in the second stage of the reforms (1994-1997)

24.1 From the 1993 parliamentary elections to the 1995 parliamentary elections
24.2 Rating of the problems which worry the population
24.3 What is "to live normally?"
24.4 General dynamics of the evaluations of economic transformations

Chapter 25. Economic and political situation in Russia in 1999-2000.

Annex 1. Non-payments: macroeconomic analysis
Annex II. Non-payments: microeconomic analysis
Annex III. Inflation modelling in 1992-1995
Annex IV. Modelling of the inflation dynamics in 1992-1997
Annex V. Modelling of the money demand
Annex VI. Model of inflation dynamics and the interest rate in Russia in 1995 including the liquidity effect of the GKO-OFZ market
Annex VII. Model of the interest rate dynamics on state obligations


This book is the English version of "Russian Economics in Transition" monograph published in IET in 1998.

The Economics of Russian Transition
Edited by Yegor Gaidar
The MIT Press
Cambridge, Massachusetts
London, England

© 2003 Massachusetts Institute of Technology
ISBN 0-262-07219-X
HC340.12.E275 2003

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