Continuity and Change
Institutions and Transition in the Russian Forest Sector

Mats-Olov Olsson
Centre for Regional Science (Cerum)
Umeå University

Published in December 2008 by
VDM Verlag Dr. Müller
ISBN 978-3-639-09959-1 (pbk)


This book is a slightly edited version of the author's Ph.D. thesis submitted in June 2008 to Luleå University of Technology.

The research reported in this book originated in the study Institutions and the Emergence of Markets - Transition in the Russian Forest Sector conducted within the Forestry Program at the International Institute for Applied Systems Analysis (IIASA), Austria, in the period 1997-2001 and subsequently continued at the Centre for Regional Science (Cerum) of Umeå University.




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ABOUT THIS BOOK

For reasons having to do with the Soviet resource allocation model, many Russian forest sector enterprises were miserably unfit to meet the market competition that started to emerge after the disintegration of the Soviet Union in the early 1990s. To avoid bankruptcy and stay alive in Russia's transition towards a market-like system many enterprises chose to engage in non-monetary transactions, thus establishing what has become known as Russia's virtual economy. The peculiar institutions ("rules-in-use") guiding actors' behaviour in this odd system are incompatible with the operation of efficient markets.

The topics discussed in this book can be framed through the following questions: What is the general role of institutions in the on-going changes in Russian society? Are there institutions that hamper the transition process towards democracy and a market economy? If so, how do they hamper this process? How can such institutions be changed to better serve the needs of the emerging market system? These and similar questions are addressed from several different but related perspectives in a number of studies of actors' behaviour in the Russian timber procurement arena.

ABOUT THE AUTHOR

Mats-Olov Olsson holds a PhD in Political Science from Luleå University of Technology. He has done research on the Soviet Union and Russia at Uppsala University and the Centre for Regional Science, Umeå University, Sweden. In 1997–2001 he was a Research Scholar at the International Institute for Applied Systems Analysis (IIASA) near Vienna.

TABLE OF CONTENTS

Contents
List of Figures
List of Tables
Preface
Acknowledgements

    1     Introduction
  • Background
  • Organizational Setting. Purpose and Structure of the Book
  • Basic Assumptions
  • Analytical Approach
    2    Transition, Institutional Change and Democratization in Russia—A Note on Theory
  • Setting the Stage
  • Transition the Russian Way
  • Institutional Change in the Russian Transition
  • Democracy, Democratization and Trust-Building Policy-Making
    3    The Russian Detour: Real Transition in a Virtual Economy
  • Why is the Russian Bear Still Asleep after Ten Years of Transition?
  • Institutions and the Development of Markets
  • How Do We Identify Movements Towards Markets?
  • Market Building and the Virtual Economy
  • Business Behaviour in a Virtual Economy
  • Business Behaviour in the Russian Forest Sector
  • Production, Productivity and Employment
  • Forest Firms in the Virtual Economy
  • Voices from the Margin
  • The Regional Dimension
  • Making an Aquarium of the Fish Soup?
  • What Should Be Done?
    4    Systemic Interventions to Promote Institutional Change in the Russian Forest Sector
  • Background and Purpose
  • Assessment Criteria
  • Some Theoretical Concepts and Empirical Facts
  • The Policy Exercise Workshops in Murmansk, Karelia, and Arkhangelsk
  • Assessing Performance and Outcome
  • Conclusion: Lessons Learned

    5    The Russian Virtual Economy Turning Real: Institutional Change in the Arkhangelsk Forest Sector
  • The Theory of the Virtual Economy
  • Previous Research on the Virtual Economy in the Russian Forest Sector
  • A Case Study of Arkhangelsk: Objectives and Approach
  • The Importance of the Forest Sector for Economic Performance
  • Assessing the Market Adaptation of Forest Enterprises in Arkhangelsk
  • Structural adn Behavioural Changes in the Russian Economy
  • Concluding Remarks
    6    Assessing the Structural Prerequisites for an Efficient Russian Political Market
  • Introduction
  • Theoretical Approach
  • The Constitutional Embedding of the Russian Political Market: Specifying the Structure and Empowering the Actors
  • Discussion and Assessment
  • Concluding Remarks
    7    Summary and Conclusions
  • Merits of Using an Institutional Approach and Opportunities Foregone
  • Characteristic Features and Persistent Problems of the Russian Transition in Its First Decade
  • The Russian Transition in Its Second Decade
  • Theoretical Contributions and Implications for Policy and Further Study
    References

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