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Theory of Cycles of M. I. Tugan-Baranovsky: View from the XXI Century

Theory of Cycles of M. I. Tugan-Baranovsky: View from the XXI Century

Journal of Institutional Studies, , Vol. 8 (no. 2),

The paper is devoted to the theory of cycles of M. I. Tugan-Baranovsky, the scientific premises for the concept’s formation, the main stages of its development and the historical fate of Tugan-Baranovsky’s doctrine and its role in the advancement of the idea of long-wave economic dynamics. In the first phase (from 1847 to 1894), scientists have tried to figure out the causes of economic crises. The concepts of S. J. Loyd, W. S. Jevons, C. Juglar, E. Laveleye, S. Sismondi, K. Marx and F. Engels are investigated.
 
The second stage (from 1894 to 1919) is linked with the name of M. I. Tugan-Baranovsky. Three lifetime editions of his master's thesis are analyzed, the relationship between simple commodity production and capitalist economy is shown. The advantages and disadvantages of the reproduction schemes of M. I. Tugan-Baranowsky, as well as the reasons for the success of his theory of cycles are described.
 
The third stage (from 1922) in the development of the cycle theory is associated with the name of N. D. Kondratiev who was the student of M. I. Tugan-Baranovsky.
 
He created the theory of long-wave cycles conditions. The paper details the contribution of Joseph A. Schumpeter, who tried to link the short-term, medium-term and long-term fluctuations in market conditions. In 1910-1940 years the questions of understanding the nature of innovation, their role in the development of society and the link between innovation and long conjuncture cycles come to the fore. The period 1940-1970 characterized by increasing the role of macro-economic analysis in the study of the cycles theory. The present time is characterized by the cycle theories which can be described as the alternative approach: institutionalism, evolutionary economics, management (innovation management).

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Risks Facing the Retailers and Vertical Restraints

Risks Facing the Retailers and Vertical Restraints

Journal of Institutional Studies, , Vol. 8 (no. 2),

Vertical restraints such as exclusive territories may be considered as an alternative to the compensation paid to retailers for taking the risks associated with market shocks. For the first time this approach has been put forward in (Rey and Tirole, 1986). In (Hansen and Motta, 2015) this concept has been further developed, but these authors have come a diametrically opposite result to what Rey & Tirole had reported. The goal of both papers was to compare exclusive territories and retailers’ competition from the point of view of the supplier. In (Rey and Tirole, 1986) the competition was the preferred solution, in (Hansen and Motta, 2015) - the exclusive territories. The explanation of this discrepancy proposed in (Hansen and Motta, 2015) doesn't look convincing enough. The paper proposes a new explanation based on the analysis of the attractiveness of the considered lotteries for the retailers. In (Rey and Tirole, 1986) they were ready to pay for the lottery, but in (Hansen and Motta, 2015) - pretend to get a compensation. Accordingly, in the first case the supplier prefers to allow competition between dealers, in the second - to provide exclusive territories in order to reduce the compensation to be paid to the dealer for participating in the lottery.
 
The paper discusses that the better solution is to consider not the risks associated with market shocks, but the retailers’ risks associated with the so called «cooperative specific investments» (manufacturer can prefer another partner on ex post stage). Trying to support the retailers’ incentives to make cooperative investments, supplier voluntarily redistributes control in favor of retailers.

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Dynamics the Transaction Sector of the Russian Economy: As Taught by D. North

Dynamics the Transaction Sector of the Russian Economy: As Taught by D. North

Journal of Institutional Studies, , Vol. 8 (no. 2),

The paper considers the methods of transactional costs measuring on the micro- and macrolevels on the basis of Russian scientists works. The conclusions on application of direct and indirect calculation methods and explicit and implicit costs on the microlevels are made. Transactional costs are estimated using the method by D. North and J. Wallis. However besides this approach the methods of transactional costs calculation using gross output share (and its components) of transactional sector in gross output (and its components) in the whole economy. In a whole, on the macrolevel the method of direct count and relevant statistical date are mainly applied.
 
The paper applies two approaches to assess changes in transactional sector of modern Russian economy: the North-Wallis approach (transactional share in GDP/GNP of a country) and the author's approach which estimates dynamics of gross output of transactional sector in gross output of the whole economy. The informational base of the research was the Russian national accounting system for 2002–2014. We considered structure and dynamics of gross output and GDP of Russian economy and estimated its productivity degree. Also we investigated trends in development of basic (transformational) and transactional sectors of the economy, revealed leading branches in GDP production and in relative production productivity.
 
We analyzed rates of gross added value growth in both sectors. Transactional costs of the Russian economy are estimated using two approaches, correlation links between transactional costs per unit spent for economy gross output in comparable prices and real gross output and its components growth rates are revealed. Also we showed influence of transactional costs on GDP dynamics. Conclusions on trends in transactional sector alteration and its influence on dynamics of main macroeconomic parameters significantly differ from those made on the basis of analogous calculations for the years 1990–2001.

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Individual Freedom and the Social Welfare

Individual Freedom and the Social Welfare

Journal of Institutional Studies, , Vol. 8 (no. 2),

Freedom as the category refers primarily to philosophical or legal concepts. But in reality, freedom is a determinant, directly affecting the welfare. In these terms it includes an implementation of the decision-making capacity by individuals and actions in accordance with personal interests.
 
The author attempts to critically analyze the freedom concepts. The freedom means that each person is free from any restrictions («negative freedom»), is free to act («positive freedom») and is able to make his own choices («psychological freedom»). In practice, these ideas are inseparable. Analysis of individual freedom involves consideration of man as a rational, autonomous actor. An alternative to this concept is the social freedom concept; it presupposes the freedom of human relations. The aim of the study is not to measure the degree of freedom in society, but is to analyze the mutual determination of the social welfare level and individual freedom.
 
The state is a guarantor of rights and freedom equality, and the main challenge for him is not to become a "nanny-state" with an excessive emphasis on the paternal function. Paternalism in this regard is considered in the paper as an interference with individual freedom. However, it serves a good purpose - help individuals - and can be justified if a person increases the opportunities for the implementation of a rational choice or other moral reasons.

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Corruption and the Architecture of Paramilitary Bureaucracies: Comparing the American and the Russian Police

Corruption and the Architecture of Paramilitary Bureaucracies: Comparing the American and the Russian Police

Journal of Institutional Studies, , Vol. 8 (no. 2),

Despite institutional change, corrupt networks have been tremendously successful enterprises at the expense of the public good; returning and evolving with new elements. For public sector corruption to prosper, bureaucracies must possess certain structural characteristics which facilitate criminal behavior. Although public organizations have been largely studied, it is less clear how their structure creates opportunities for deviance. Given the understudied field of paramilitary bureaucracies and the deleterious consequences of corruption for socioeconomic development and (inter)national security, we seek to understand: “How and why does the structure of police organizations facilitate corruption?” To address this question, we draw upon organizational, covert networks, and organized crime theories, and test them using a conditional uniform graph test on a dataset that includes the formal hierarchical structures of the modern police forces in Russia and the United States. We show that despite operating in largely different institutional regimes, the Moscow and the Los Angeles police department exhibit similar structural characteristics. Police bureaucracies’ structures are efficient in performing complex tasks, but are highly conducive to concealment, creating numerous temptations and opportunities for corruption. Lastly, we show that police organizations are scale-free networks which makes them extremely vulnerable to corruptive pressures.

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Entrepreneurs As a Subject of Modern Russian Economy Development: General Characteristics and «Resource Type» Regions Specificity

Entrepreneurs As a Subject of Modern Russian Economy Development: General Characteristics and «Resource Type» Regions Specificity

Journal of Institutional Studies, , Vol. 8 (no. 2),

Nowadays, special urgency has the question about the ability of entrepreneurs to act as a subject of the Russian economy development. Analysis of the specificity of targets and resource potential of the modern Russian entrepreneurs is fulfilled in the context of the general features of entrepreneurship development in the countries with "emerging markets". Distinction between "politicized" entrepreneurs, as prevailing type of entrepreneurs in these countries, and "classic" entrepreneurs is shown. Two basic strategies of their behavior in the form of "rent-seeking" and "institutional" entrepreneurship are highlighted. Incentives and constraints of "institutional" entrepreneurship strategies selection made by "politicized" entrepreneurs are considered in the context of assessing the potential of the Russian entrepreneurs as a subject of economic development as well as emerging positive externalities. Analysis is regionalized to consider the specificity of the behavior of entrepreneurs in the economy of the "resource type" regions. Models of "enclave dual economy" and "integrated regional economy" are discrete structural alternatives for "resource type" regions development. "Sectoral" frontiers of net positive externalities that emerge from institutional entrepreneurs’ activity related to the implementation of productive configurations institutions are considered as well as a choice between the "rent-seeking" and "institutional" entrepreneurship. Kemerovo region and Krasnoyarsk region are the basic regions to analyze incentives and constraints of entrepreneurs in the economy of the "resource type" regions. The authors use sociological tools in the form of semi-structured interviews. Initial evaluation of the eight entrepreneurs’ strategies of Kemerovo region and Krasnoyarsk region shows that the most of them used elements of the institutional entrepreneurs’ strategy and focused on the diversification of the regional economy. At the same time, the presence of individual achievements does not mean a significant improvement in the conditions for the development of productive entrepreneurship. The lack of an effective system of communications between institutional entrepreneurs and decision-making representatives of regional authorities is the key problem.

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Perceptions of Higher Education Reforms in Russia: the Role of Institutions and Social Capital

Perceptions of Higher Education Reforms in Russia: the Role of Institutions and Social Capital

Journal of Institutional Studies, , Vol. 8 (no. 2),

Recent reforms of higher education in Russia are aimed at boosting the quality and efficiency of the educational process. Nevertheless, in most cases, implemented institutional and organizational innovations do not work properly. Calculative technologies and various ratings, which are widespread today, opened up the opportunities for regular managerial interventions. These interventions are not neutral. In Russian higher education, the mania for measurement resulted in a deficit of trust and rampant bureaucracy. Historically, the system of higher education has been based on specific values and institutions. Academic freedom and autonomy are extremely important for the members of the academic community, and these values cannot be eliminated. Implemented reforms destroy old institutions and organizational structures. However, new institutions, being inconsistent with present working rules and practices, are not able to replace the old ones. Such inconsistency can result in inefficiency. Social capital plays a crucial role for development and growth in the field of higher education. The structure of social capital in the field embraces three components: trust, social engagement and social integration. These elements must be taken into account when implementing educational reforms. The higher the employees are motivated and experience personal growth, the more they feel embedded in their job. We have analyzed the discourses of the key actors within the universities of Rostov Region. The discourse analysis shows that bureaucracy, constant institutional and organizational changes and the reduction of academic freedom are perceived as significant factors that influence labor productivity, organizational efficiency and the quality of educational services in the field of higher education.

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The Individual View on the Complexities of the National Economy Modernization (Reflections on the Book by G. I. Khanin)

The Individual View on the Complexities of the National Economy Modernization (Reflections on the Book by G. I. Khanin)

Journal of Institutional Studies, , Vol. 8 (no. 2),

The paper is based on reflections on the key aspects of the Russian national economic history through the lens of judgments and assessments proposed in the fundamental and specific 3-volume work by G. I. Khanin. The paper stresses such strong points of this research as its fundamental and encyclopedically wide coverage, broad informational base of sources, academic ‘bona fide’ and critical approach to reliability of various indicators of the Soviet and post-Soviet statistics. Especially highlighted is the author’s proficiency in the author’s analysis of various branches and sectors of the national economy. At the same time, the two principal judgments by G. I. Khanin are criticized as subjects to doubt and possible revision: as regards to high efficiency of the centrally planned economy and historical failure of its market–oriented transformation. Alongside with specific historical aspects highlighted in the work by G. I. Khanin, the paper discusses a set of methodological issues: on feasibility of choice of alternatives in historical development, challenges to modernization and the power of path dependence, criteria of efficiency of socio-economic transformations, influence of ideologies on elaboration and implementation of economic policy.

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Nostalgic Consumption: Sociological Analysis

Nostalgic Consumption: Sociological Analysis

Journal of Institutional Studies, , Vol. 8 (no. 2),

The presented paper focuses on the phenomena of «commercialization of nostalgia» which is defined as the use of Soviet attributes, symbols and artefacts in promotion and branding of contemporary market goods. What can be evident for any observer and what was highlighted by Russian scholars is that Soviet stylistics gain popularity within contemporary gastronomy. Authors make an attempt to answer, why do consumers tend to return to the Soviet heritage and how does “nostalgia proneness” emerges. Process of consumption is socially constructed and could not be reduced to individual acts of purchase, since individual choice depends on institutional context. Evolved as a result of combination of institutional factors, consumer habits turn into «behavioral lock-in». Producers have to adapt consumers needs – it is especially significant for new participants in the established market niche.
 
Interdisciplinarity of social sciences makes it possible to operationalize contradictory concepts of memory, past and nostalgia. Gastronomy transfer basic cultural attitudes. Within post-Soviet Russian context it becomes commemorable. By mapping the previous research in the scope of nostalgic consumption as well as conceptualizing the ideas of memory and nostalgia, authors state that the phenomenon should not be reduced to a simple study of the "meanings" and "practices", since these local phenomena are symptoms of broader social and political processes.

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