Chapter 3 Why did Russia fail in its agricultural reform? A comparative analysis of property rights in Russia and the Baltic countries

Purpose – Chapter 3 analyses if Russia's current problems in agriculture, particularly the slow growth of labour productivity are due primarily to the weak property rights of shareholders stemming from the privatisation and therefore attributed to Russia's failure to implement the family farm project as supposed by the World Bank and many other international institution.

Methodology – To compare the development of labour productivity and farm structure in Russia and the Baltic countries after decollectivisation.

Findings – The comparisons show that the outcomes in Latvia and Lithuania are not in fact any better than in Russia, even though large-scale farms here have largely been replaced by individual farms. They also show that the most likely explanation for the extremely poor results in Lithuania lies in the overly strong property rights of shareholders. Estonia's success compared to Russia's failure cannot be explained away by stronger property rights or family farming, but the reasons lie in the country's more successful application of Soviet farming traditions, the capability of the middle class of former Soviet farms to maintain and modernise large-scale production in capitalist conditions.

Originality/value of chapter – It calls into question one of the basic interpretations presented by World Bank, IMF, OECD and EBRD.