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Privatization and Transition in Russia in the Early 1990s

Book Description

Few economic events have caused such controversy as the privatization process in Russia. Some see it as the foundation of political and economic freedom. For others it was economics gone wrong, and ended in "Russians stealing money from their own country". As Russia reasserts itself, and its new brand of capitalism, it is ever more important that policy makers and scholars understand the roots of the economic structure and governance of that country; what was decided, who made the decisions and why, what actually transpired, and what implications this has for the future of Russia.

This work, written by two senior advisors to the Russian government, has unique access to documentation, tracking the decision making process in the Russian Mass Privatization process. By close reference to events, and supplemented by interviews with many of the key participants, it shows that the policies adopted were often influenced and shaped by different forces than those cited by current popular accounts. The book challenges the interpretation of Russian privatization by some of the West’s most eminent economists. It underlines that economists of all schools, who bring assumptions from the West to the analysis of Russia, may reach false or misleading conclusions. It is an essential guide for anyone interested in Russian economic reform, and anyone who seeks to understand this enigmatic country, and its actions today.

Table of Contents

  1. Cover
  2. Half Title
  3. Title Page
  4. Copyright Page
  5. Table of Contents
  6. List of illustrations
  7. Acknowledgements
  8. Introduction
    1. Background to the book
      1. A guide to the book
      2. Why is the book significant?
    2. Privatization prior to 1992: a synopsis
  9. 1. Privatization and the Russian transition: perspectives
    1. Background to privatization in Russia
      1. Pressure for reform, 1985–1991
      2. The decisions
    2. Perspectives on privatization
      1. The early reputation of privatization
      2. Reception of reform: mid-1990s
      3. What went wrong?
      4. The consensus shift
      5. Further reflections
    3. Conclusion
  10. 2. The Mass Privatization Programme: the ideas, their evolution and their embodiment in law
    1. Introduction
    2. Who was responsible for privatization?
      1. Constitutional considerations
      2. Institutional considerations
    3. The ownership of Russian enterprises prior to the 1992 Privatization Programme
      1. The appointment and involvement of the reformers
    4. The Privatization Programme of June 1992
      1. Categories of enterprise
      2. Privatization options
      3. Other aspects
      4. Vouchers
    5. Discussion
  11. 3. Reforming the communist inheritance: the goals and limits of privatization
    1. The command economy
      1. The role of money and prices
      2. Efficiency, profitability and productivity
      3. Credit and capital
      4. Commercial law
    2. Monopoly and transport systems
      1. Enterprise towns and the social role of enterprises
      2. Labour and labour mobility
    3. The goals of privatization
      1. Economic objectives
        1. Ownership
        2. Creating a market economy
      2. Social and political objectives
        1. Generating popular support
        2. Changing attitudes
        3. The end of the command-administrative economy
      3. Summary
  12. 4. Implementation of privatization, 1992–1994
    1. Implementing the 1992 programme
      1. Privatization of small enterprises
    2. Privatization of medium and large enterprises
      1. The challenge from associations and holding companies
      2. Response by enterprises
      3. Voucher design and its effects
      4. Implementation on the ground
      5. What was being sold and how?
      6. What was achieved?
  13. 5. Implementation of privatization after 1994
    1. Introduction
    2. Interpretations
    3. Summary of the LFS arrangement
    4. The historical context
      1. 1994
      2. 1995
      3. The period in perspective
  14. Conclusion
    1. Introduction
    2. Politics
    3. Economics
    4. Philosophy
    5. Summary
  15. Appendices
    1. Appendix 1
      1. Text of the 1992 Privatization Programme
      2. State privatization programme of state and municipal enterprises in the Russian Federation in 1992
        1. 1 Introduction
        2. 2 Classification of facilities and businesses according to the possibility of privatization in 1992
        3. 3 Estimatedfigures (indicators) ofprivatization for organs of state power and management
        4. 4 Norms of distribution offunds from privatization in 1992 and forecast of their revenues from 1992 to–1994
        5. 5 Methods of privatization and the benefits provided by privatization in 1992
        6. 6 Conditions offering credit for privatization in 1992
        7. 7 The use ofpersonal privatization deposits of citizens in 1992
        8. 8 The use of foreign investment
        9. 9 The order of interrelations of state privatization organs among themselves, with other organs of state management and budgets of all levels
        10. 10 Formation of special-purpose financial funds using the revenue received from privatization
        11. 11 Requirements for local programmes of privatization
    2. Appendix 2
      1. The role of associations
        1. 1 Representing the firms
        2. 2 Supply coordination
        3. 3 Implementation of R&D
        4. 4 Marketing
        5. 5 Investment/financing
        6. 6 Production coordination
      2. Conclusion
    3. Appendix 3
      1. Inter-enterprise debt
        1. Inter-enterprise debt background
    4. Appendix 4
      1. The conduct of voucher auctions in the Russian regions
        1. Smolensk voucher auctions
        2. Privatization in Novosibirsk
        3. The privatization process
        4. Setting up a privatization centre
        5. Voucher trading
  16. Notes
  17. References
  18. Index