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Effects of Institutional Differences on Economic Growth

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Studies on Russian Economic Development Aims and scope

Abstract—

This article builds on the concept of institutional differences and the related concept of institutional rent in the context of the multitier Russian economy discussed in [1]. The analysis introduces three groups of sectors: giant, large, and other Russian companies. The boundaries between the sectors are fuzzy. This article seeks neither to analyze the quantitative characteristics of their activity nor to assess the significance of institutional differences and institutional rent for economic growth. No recommendations are given as to how to address the negative effects of the existing institutional trap. In this context, the aim of this article is to identify approaches to solving the listed problems.

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Notes

  1. See: http://expert.ru/dossier/rating/expert-400/

  2. Appears to be underestimated, with this level being differentiated by sector.

  3. Roughly consistent with the above mentioned Expert-400 data.

  4. Likely corresponds to the maximum, rather than average, level for each sector.

  5. See: http://riarating.ru/infografika/20180130/630080911.html

  6. Here and below, the data in the figures were calculated by the author on the basis of the Expert-400 rating.

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Authors and Affiliations

  1. Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia

    A. A. Blokhin

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  1. A. A. Blokhin
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Correspondence to A. A. Blokhin.

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Translated by A. Kobkova

This article is the second one in a cycle of two articles conceptualizing the Russian economy as a hierarchical system of sectors. The differences in the institutional conditions between the sectors allow some of them to appropriate institutional rent and receive incomes at the expense of the others. This article suggests approaches to assessing the effects of institutional inhomogeneities on economic growth. Different options are proposed regarding the existing institutional trap—from a crisis-type restructuring of the economic model to a controlled transition and a mild, compensation-based redistribution of institutional rent. Understanding the logic of this transition may be critically important for designing long- and medium-term social and economic development strategies and forecasts for the country.

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Blokhin, A.A. Effects of Institutional Differences on Economic Growth. Stud. Russ. Econ. Dev. 30, 490–497 (2019). https://doi.org/10.1134/S1075700719050046

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