An economy in transition. Essays on the economic policy of post-communist Russia 1991-1997

Annotation
This work is not a research of Russia's economic policy. Naturally, it has a certain historical context, but it is not this context that determines the character of the book. The authors focus their attention on the problems of economic policy and on the problems of their solution. Strictly speaking, the book considers the set of politico-economic problems faced by a country departing from communism, the alternative variants of their solution, the reasons for choosing one or other variant, and finally the consequences of their realization.

Contents

Introduction. Economic reforms and revolution
1. Way out of communism
2. Revolution and state power
3. Revolutionary economic crisis
4. Revolutionary transformation in contemporary Russia

Part 1. 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 2.  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 176
6.2 Strengthening of populism and softening of financial policy 180
6.3 Monetary policy in 1992 184
6.4 Attempts at changing financial strategy with uncoordinated movements between the Government and the Central Bank 192
6.5 Reconstruction of public revenues and expenditures 194
Chapter 7. Formation of preconditions for the financial stabilisation 202
7.1 Influence of political factors on the state of public finance 203
7.2 Monetary policy in 1993 209
7.3 Reduction in budgetary obligations after 1993 constitutional crisis 215
7.4 Reconstruction of 1993 budget 217
7.5 Slowing down of the pace of transformations in financial sphere: "moderately tight" policy 220
7.6 Certain peculiarities of 1994 budget crisis 224
7.7 Reconstruction of 1994 budget 232
7.8 Aim at the tight financial policy 236
7.9 Monetary policy in 1994 238
Chapter 8. Financial stabilisation in Russia 242
8.1 Political preconditions for financial stabilisation 242
8.2 Monetary programme for 1995 245
8.3 Budgetary policy during the period of financial stabilisation 247
8.4 Tightening of monetary policy and inflationary inertia 267
8.5 The role of currency policy in achieving stabilisation 271
8.6 Increase in the real rouble value 274
8.7 Crisis in the inter-bank market 277
Chapter 9.  Interdependence of the macroeconomic stabilisation and political processes. The year of Presidential elections in Russia 279
9.1 Political uncertainty and the economy 282
9.2 Macroeconomic problems of the 1996 election campaign 285
9.3 Government economic policy during the uncertainty of the election period 304
9.4 Economic policy after the presidential elections 317
9.5 The phenomena of the postponed growth 331
Chapter 10. Macroeconomic stabilisation and the fiscal crisis 335
10.1 Political and economic outlook: new "window of opportunities" 335
10.2 Main aspects of government actions and the reaction of the legislative power 339
10.3 Public finance 342
10.4 Reconstruction of the 1997 budget 352
10.5 Monetary policy 355
10.6 Increase of the new threat  of the reform policy crisis 358
10.7 Currency and stock market overview 361
Chapter 11. Fiscal problems: Russia in the context of the international experience in the post-communist stabilisation 369
11.1 The legacy of the command economy 370
11.2 The first attempts at stabilisation 374
11.3 Further fiscal adaptation in the countries of Central Europe and the Baltic states 378
11.4 Central Europe: the trap set be the post-socialist social state 386
11.5 Fiscal outlook in the countries lagging behind in the implementation of reforms 388
11.6 Anatomy of the Bulgarian crisis 396
11.7 Conclusion 401

Part III. Institutional Reforms in Russian Economy 403

Chapter 12. Russian privatisation as a process for the formation of the institutional basis of economic reforms 405
12.1 Ideas, stages and results of privatisation 405
12.2 Privatisation models in transition economies: comparative characteristic 412
12.3 Russian privatisation model: the stage of non-economic transfer new ownership rights 434
12.4 Specificity of the money privatisation (post-voucher) 439
12.5 The policy of the government and the banks towards pawned stocks of a number of big enterprises 453
12.6 New phase in the property redistribution  456
12.7 Property structure and the interests of the stockholders in the context of residual sales  458
Chapter 13. Some institutional problems in the post-privatised development of Russian corporations 466
13.1 Efficiency of the privatised enterprises and the problems of management of publicly owned shares 466
13.2 Industrial-financial groups 476
13.3 Formation of the model of corporate governance 481
13.4 Institutional aspects of the development of corporate shares market, financial intermediaries 488
Chapter 14. Russian banks in transition period 503
14.1 Peculiarities of the emerging contemporary banking system in Russia 503
14.2 Capital concentration in the banking sector 513
14.3 Functions of Russia's commercial banks 517
14.4 Commercial banks and the real sector of the economy 524
14.5 The problems of reliability of Russia's banking system 538
14.6 Monetary instruments for regulating banks liquidity 545
14.7 Emerging system of regulation and control of banking activity 550
14.8 International aspect of the problem of stability of Russia's banking system 559
Chapter 15. Institutional reforms in agro-industrial complex 561
15.1 The need for the agrarian reform and its main tasks 561
15.2 Specifics of the agrarian reform in the countries with  different types of the economy 567
15.3 Institutional reform in agriculture 574
15.4 Institutional reforms in the market and food processing system (3rd sphere of AIC) 589
15.5 Formation of the credit system in agriculture 602
15.6 Formation of the state support system of agriculture 625
15.7 Reform of the foreign trade regulation of AIC 643
Chapter 16. Institutional reforms in social and cultural sphere 649
16.1 The need for reforms in the branches of social and cultural sphere 649
16.2 State and the groups of special interests in social and cultural sphere 654
16.3 Transition from the budget to insurance medicine: ideology and aims of the reform in health care 658
16.4 Practical introduction of the new system of financing health care 665
16.5 Checking of the reforms. Attempts at restoring the state system of health care 672
16.6 Institutional changes in the sphere of education 675
16.7 Institutional changes in the sphere of culture 683
16.8 Shadow privatisation in the social sphere 688
16.9 Commercial activity of entities in the social and culture sphere 693
16.10 Evolution of social and culture branches during the reform years  697
16.11 Directions for the necessary transformations 703
Chapter 17. Housing reform: features and consequences of the chosen model 713
17.1 General characteristic of the housing system in the Soviet period 714
17.2 Concept of the housing reform 717
17.3 Results of the housing reform in 1994-1997 725
17.4 New stage of the reform: what are the prospects? 737

Part 4. Crisis in the real sector of the economy  747

Chapter 18. General phenomena in the development of the real sector in the reform period 749
18.1 Main trends of development and factors  of economic restructuring 749
18.2 Production of GDP and its use 759
18.3 Restructuring of the real sector of the economy 775
18.4 Investment process in the period of market-oriented reforms 788
Chapter 19. Branch peculiarities in the development of the real sector 802
19.1 Branches of industry during the period  of market-oriented reforms 802
19.2 Agrarian production in the reform years 814
Chapter 20. Foreign economic activity in the period of market-oriented reforms 827
20.1 Liberalisation of foreign trade: results and prospects 828
20.2 Consequences of the policy of foreign trade preferences and privileges 838
20.3 Goods structure of Russia's foreign trade 842

Part 5. Social costs of the reforms 857

Chapter 21. Some trends in the evolution of the labour market 859
21.1 Unrealised forecasts 859
21.2 Uncomplete employment: objective data and subjective interpretation 864
21.3 Indices of the registered labour market 867
21.4 Regional labour markets 870
21.5 Migration of labour: branch and regional aspects 877
21.6 Financing of the employment policy 891
Chapter 22. Population's income during the period of economic reforms 902
22.1 Social and economic differentiation of Russia's population in 1992-1997 902
22.2 Shift in the poverty line 910
22.3 Influence of the inflation on the nominal household income: inflation and poverty 919
22.5 Annex 924

Part 6.  Economic reform and dynamics of the public opinion (1991-1997) 929

Chapter 23. First stage of economic reforms (1991-1993) 931
23.1 Start of liberal reforms 937
23.2 Influence of price liberalisation on the consumer market 945
23.3 Vouchers 948
23.4 Attitude towards private property and privatisation 950
23.5 From the April referendum to October events in 1993. Evolution of the attitude towards economic reform and power 961
Chapter 24. Main trends in the attitude of the population towards market transformations in the second stage of the reforms (1994-1997) 971
24.1 From the 1993 parliamentary elections to the 1995  parliamentary elections 971
24.2 Rating of the problems which worry the population 979
24.3 What is "to live normally?" 985
24.4 General dynamics of the evaluations of economic transformations 993

Annex I. Non-payments: macroeconomic analysis 1005
Annex II. Non-payments: microeconomic analysis 1034
Annex III. Modelling of inflation in 1992-1995 1050
Annex IV. Modelling of the inflation dynamics in 1992-1997 1054
Annex V. Modelling of the money demand 1068
Annex VI. Model of inflation dynamics and the interest rate in Russia in 1995 including the liquidity effect of the GKO-OFZ market 1083
Annex VII. Model of the interest rate dynamics on state obligations 1092