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What characteristics of firms give them the confidence to invest in settings rife with expropriation by local officials? Empirically, firms in the developing world often face the threat of expropriation from local agents of the state rather than a centralized autocrat. Because policing local officials is costly, the state cannot easily credibly commit to doing so. This has negative consequences for investment. We argue that one solution is to allow firms to approach the state directly to ask for intervention. Not all firms are equally able to successfully get the attention of the state, however, so this mechanism only works for some. We develop an argument about the firm-level characteristics – large-scale employment, political connections, foreign ownership, and business association membership – that should make the central state more attentive to calls for help. Because firm with these characteristics are more likely to secure intervention against predatory bureaucrats, the latter are less likely to try to expropriate them. These firms’ investment decisions should be less sensitive to local expropriation than other firms. We test this argument using data on cases of decentralized expropriation across Russia’s regions and firm-level data from a cross-regional, large scale survey of Russian firms.
The transition from a short-term cost-plus tariff regulation to either a long-term rate-of-return or long-term price cap regulation in Russia started in 2009 and was completed in 2012, causing substantial changes in investment over the course of the reform. We estimate panel data of 46 Russian electricity distribution entities with a dynamic investment model using the system generalized method of moments and addressing potential endogeneity issues. We show that, despite the noncredible regulatory policy, the transition from short-to long-term regulation had a positive and significant effect on the investment rate of regulated entities. The specific long-term regulation design applied in Russia from 2008 to 2017 (either rate-of-return or price cap) had no effect on the investment rate. These results are important for the introduction of changes in regulatory frameworks in developing countries.
We investigate alcohol consumption as one of the main factors contributing to variation in the gender gap in life expectancy in the Russian regions. We consider the socioeconomic indicators and mortality coefficients that enable us to capture the causes of death related primarily to alcohol abuse and smoking. We assume that macroeconomic situation, coupled with alcohol consumption are substantial determinants of the gender gap in life expectancy in the Russian regions. A panel data analysis confirms that alcohol consumption has a significant influence on the gender gap in life expectancy and reduces the life expectancy of men first and foremost, as they are more inclined toward unhealthy behaviours. We have determined that employment and income support policies should be conducted in conjunction with the anti-alcohol policy. Social policy aimed at reducing alcohol consumption should be vigorously reinforced during an economic recovery.
The debate on the increasing income and wealth inequalities in the USA and some other advanced economies often disregards the opposite trend, i.e. decreasing income inequalities between individuals throughout the entire world. The purpose of this chapter is to examine the potential trade-off between both trends and the role of globalisation in such a trade-off. Another important question relates to the impact of this trade-off on global governance. On the one hand, catch-up growth in emerging-market economies and the resulting decrease in global inequality can help reduce the economic and social sources of political conflicts and tensions between countries and enable their cooperation on various issues such as trade, environment, climate change, health, fighting terrorism, managing migration and many others. On the other hand, growing income inequalities within advanced economies can undermine the existing global political and economic order and boost protectionism and nationalistic egoism in many areas.
It is assumed that a perfect balance between student academic achievement and university quality is beneficial both for students and higher education institutions (HEIs). Matching theory predicts the existence of perfect matching between the two groups in the absence of transaction costs associated with university enrollment. However, in this study we show cases of mismatch situations in Russia under the Unified State Exam (USE) – the standardized student admission mechanism. This research studies the reasons for this phenomenon for minimal transaction costs and the emergence of unequal access to HEIs. Based on data on Moscow high school graduates who entered university, the determinants of the mismatch between the quality of universities and applicant abilities are assessed. It is shown that although in most cases favorable matching results are established, the individual student achievement results themselves are subject to the influence of school and family characteristics. Thus, inequality of access can be formed at stages preceding HEI enrollment.
During the past few decades, many developing countries have initiated public procurement reforms. One of their prime objectives was to limit corruption, enhance competition, and reduce the scope of procurer opportunism. However, radical changes in regulations have resulted in the emergence of new opportunities for opportunism this time on the supplier side.
In the modern world, competition policy is an important part of global governance. Coordination of efforts between different countries is not an easy task, because the distribution of gains and losses from anticompetitive conducts is uneven across the globe. We identify joint interests of BRICS to influence international competition policy regime and analyse the effects of domestic enforcement on global markets. Among the targets of competition enforcement with large effects on global markets are conducts of international property rights holders. BRICS authorities apply remedies in order to weaken intellectual property rights (IPR) protection, both under merger approval and infringement decisions on unilateral conducts.
Similarity of the rules on merger control in BRICS gives reason to believe that global governance in the form of a supranational advisory body with the right of legislative initiative is possible in this area. On the other hand, a review of existing legislation and the institutional structure of BRICS enforcement indicates that enforcement against anticompetitive conducts is unlikely to become the focus of coordinated action.
During the first years of the transition to the market economy in Russia, many people experienced the whole range of stressful labor market events, including job loss, wage cuts and nonpayments; some people had to change occupations or take on additional work. These events were caused externally by the unprecedented structural shifts in the economy. This natural experiment provides an opportunity to estimate the causal effect of various labor market shocks on individual health and health-related behaviors. Propensity score matching and difference-in-difference estimates using household survey data show that labor market shocks during the early transition had long-term negative effects on individual health. I also find an increased incidence of smoking and alcohol consumption as well as a higher risk of certain types of chronic health problems for the people affected by labor market shocks.
The paper addresses the question, what is the underling nature of the Russians’ demand for the state support in three fields such as labour market and employment, social investments, and material support. Based on the recent findings from social policy studies, the authors have tested four different mechanisms, which are as follows: (a) demographic features of the population, (b) household incomes and disposable assets including human and social capital, (c) interests, and (d) locus control and cultural settings. Drawing on the all-Russia representative Monitoring survey conducted by the Institute of Sociology of the Federal Center of Theoretical and Applied Sociology of the Russian Academy of Sciences in 2018, the authors argued that population’s demands for the state support has very complex nature. Moreover, the relative impact of income has a paradoxical nature. On the one hand, the Russian data confirm the hypothesis of ‘altruistic reach’ developed in recent studies, which predicts that, in societies with high inequalities, higher incomes boost the probability of demands for the redistributive settings. On the other hand, higher incomes foster state escapism of those Russians who do not consider state as a reliable agent capable to solve their problems.
The article analyzes the specifics of identities and attitudes of the three main strata of Russian society, identified on the basis of M. Weber's ideas of positive and negative privileges. Based on the materials of two all-Russian surveys carried out by FCTAS RAS in 2015 and 2018, it is demonstrated that these strata differ among themselves not only in their level of well-being, professional composition and educational level, but also in their identities, social well-being, attitudes, norms and values systems and assessments of current situation in Russia. While the lower and middle strata are relatively close to each other, the upper stratum (about 20% of Russians) stands out with pronounced specifics of identities, planning horizon, prevalence of nonconformist attitudes and type of locus control. The life goals of the top stratum representatives more often have a character of achievement, and their assessments of the situation in Russia, unlike those of the rest of Russians, are quite optimistic. Requests of representatives of this stratum to the state also have their own specifics, in particular there is a pronounced request for a country's breakthrough in science and high technologies. At the same time, solidarity attitudes are less common in the upper stratum, while stigmatization of the poor is more common. It is noted that the features of the attitudes and norms and values systems of the upper stratum are also reflected in the behavioral strategies of its representatives. It is concluded that the defined strata correspond to the main criteria of the classes in their neo-Weberian interpretation, and within the framework of this social structure model the upper stratum can be considered the middle class, which has pronounced specificity not only of its objective, but also subjective characteristics.
Advance price announcements in the form of general rate increase (GRIs) by liner shipping companies have recently become the subject of investigations by competition authorities in different jurisdictions, including the European Union and Russia. The main goal of this paper is to answer the question whether GRIs predict price changes of competitors. Comparison of GRIs with actual price changes in particular routes, defined as antitrust markets in competition investigations in Russia, shows a limited anti-competitive effect of advance price announcements, albeit under specific market conditions. Regression analysis, undertaken in the context of the Russian investigation, rejects the hypothesis that the GRI of a particular company would be followed by price increases of its competitors. Moreover, the frequent changes in the market shares of liner companies support the hypothesis of competition vis à vis collusion. Remedies applied by competition authorities address content and timing of GRIs. The theory of tacit collusion suggests that remedies, which further specify the content of price announcements, may paradoxically enhance non-cooperative pricing, in contrast to remedies that restrict audience of GRIs by customers.
In this paper we describe a methodology that allows researchers to measure empirically, in the form of well-defined indicators, the extent to which economic analysis and evidence is been applied in the enforcement of competition law, using data collected from the decisions of competition authorities. By mapping the value of these indicators to different legal standards, our methodology also allows one to identify the legal standards adopted in the assessment of different conducts that were investigated by the authorities. The policy implications of empirical work in this area are potentially very important, since the extent to which economic analysis is applied in the assessment of anti-competitive conduct by competition authorities may well influence the quality of this assessment (i.e. the quality of enforcing competition law, measured by the extent to which decision-errors and deterrence effects are minimised). Empirical analysis using the indicators can be used to undertake comparative analysis in different countries, to examine the extent to which authorities favour specific legal standards in the assessment of specific conducts and the way in which the judicial review process treats decisions depending on the legal standard used.
The study examined the smokers’ non-compliance rates in indoor public places in Russia and the sociodemographic factors associated with non-compliance.
Univariate analysis and logistic regression models were performed using cross-sectional data from a representative sample of Russian adults (N = 4006).
27.2% of Russian smokers did not comply with smoke-free bans. Non-compliance was attributed to sociodemographic characteristics of smokers, mainly to the number of cigarettes smoked per day, regular alcohol consumption, being aged between 15 and 34 years, being in the highest income group and living in an urban area. Neither the sex, nor the family status of smokers exerted a statistically significant affiliation with non-compliance. Higher rates of non-compliance were observed in restaurants, cafes, bars and nightclubs, common domestic premises of apartment buildings and indoor workplaces. Violations on public transport, in governmental buildings, health and sport facilities, colleges and universities were less common.
There is a need to revise the methods of enforcement with respect to sociodemographic characteristics of smokers associated with non-compliance in public places where violations are widespread.
This article analyses antitrust enforcement practice in Russian courts in the area of competition-restricting agreements. The analysis is based on the court decision database of litigations with the Russian competition authority (the Federal Antimonopoly Service (FAS)). In the database litigations that officially started in the period 2008–2012 were included. Final court decisions were evaluated, taking into account litigation duration (sometimes up to 3 years). The database contains 400 cases, including 236 horizontal agreements and 164 other agreements (mostly vertical agreements). Based on the evidence of this database, important features and problems of the interpretation and implementation of competition law in Russia and priority areas of enforcement were identified. Antitrust policy was analysed taking into account the risks of type 1 and type 2 errors, including the problem of flexibility of prohibitions (per se vs Rule of reason (ROR) approaches), standards of proof and the problem of consistency of enforcement.
After two turbulent decades (1980s and 1990s) when emerging-market economies were frequent victims of financial crises, in the first two decades of the 21st century their macroeconomic performance improved. Nevertheless, there were three crisis episodes that hit some of these countries: (i) the spill-over effects of the global financial crisis in 2008–2009; (ii) the consequences of the decline in commodity prices in 2014–2016 for their exporters; (iii) the turbulence in Argentina and Turkey in 2018. Currency crises in Argentina and Turkey in 2018 underlined again the key role of prudent domestic policies. Early policy correction can help to prevent a crisis and avoid its economic, social and political costs. If crisis cannot be avoided, the comprehensive anti-crisis package, including up-front monetary and fiscal adjustment, should be adopted as quickly as possible to arrest market panic and reverse negative expectations.