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Russian Big Business Under Sanctions: The Dilemma Between Loyalty and Exit

Russian Big Business Under Sanctions: The Dilemma Between Loyalty and Exit

Journal of Institutional Studies, , Vol. 14 (no. 4),

The article addresses behavioral strategies of top Russian entrepreneurs operating in the export and resource sectors in the context of comprehensive sanctions imposed by Western countries. The choice of behavioral strategy is considered in the context of two types of networking that have developed in the post-Soviet period. The first type of networking implies the involvement into the inner economic chains supported by the ruling group. In the second type of networking, the participants are involved into global value chains (GVCs). Two framework strategies of behavior emerged after the first “wave” of sanctions imposed in 2014. The first strategy was adopted by top entrepreneurs who have deep friendly relations with the "ruler". The proponents of this strategy, being supported by the ruling group, transformed into the operators of quasi-public resources with the minimum dependence on GVCs. The second strategy was formed by the owners of Alfa Group who sought to emphasize their political neutrality. The imposition of sanctions in 2022 showed that the first strategy was productive. Meanwhile, the strategy of Alfa Group members turned out to be a failure – the entrepreneurs were not protected from the Western sanctions and devalued their position in the Russian power vertical. Since the amount of resources distributed by the ruling group is limited, the strategy of the Russian top entrepreneurs is based on finding the balance within the two types of networking

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The Human Potential Quality of Russian Professionals: Analyzing The Data From 2010, 2021

The Human Potential Quality of Russian Professionals: Analyzing The Data From 2010, 2021

Journal of Institutional Studies, , Vol. 14 (no. 4),

In this article we analyze the dynamics of the human potential quality of Russian professionals based on RLMS HSE data from 2010 and 2021. It has been demonstrated that due to the increasing immersion of Russians in the digital environment, the overall quality of human potential has increased. However, for a third of professionals it remains low, and for one in five it is very low. Only a third of professionals are currently characterized by high indicators of the human potential quality. This is partly due to their belonging to generations that have gone through socialization in different eras, so the shift in the age structure of professionals also plays its role – under the influence of the “demographic echo” of the 1990s, the number of people under 30 in their composition decreased while the proportion of 30–39-year-olds increased. This is most typical for large cities, while rural areas are characterized by a sharp increase in the number of professionals in older ages against the decrease in the number of 30–39-year-olds due to their migration to cities. Good quality of human potential increases the chances for professionals over 60 to remain employed, but since 2010 this trend has noticeably weakened. Among the institutional factors that determine the quality of human potential the decisive role is played by factors related to the characteristics of primary socialization in the family and school, as well as the characteristics of local labor markets, including the presence of a “bonus” for professionals with a good quality of human potential for their willingness to change profession. However, in general, the situation that has developed in the country with the professionals working outside their specialty requires serious institutional changes – currently, about two-thirds of them work outside their profession. The mass nature of this phenomenon devalues the importance of specialized education in the eyes of employers, even for those professionals who are obliged to have it: every tenth among doctors, and more than half among engineers do not have a specialized education.

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The Patterns of Interaction Between Russian Citizens and NGOs in The Context of Institutional Change

The Patterns of Interaction Between Russian Citizens and NGOs in The Context of Institutional Change

Journal of Institutional Studies, , Vol. 14 (no. 4),

The article analyzes the institutional transformation of the sphere of social services in the context of the development of the non-profit sector. The institutional transformation in the field covers the issues of changing public attitudes, the level of public trust and prevailing stereotypes. Besides, online interactions that are spreading while providing and receiving services influence the processes of the individual choice under constantly changing market conditions. The results are based on two sociological surveys devoted to studying the attitude of citizens towards the non-profit sector of social services. The surveys were conducted in Russian regions in 2019(n=1204) and 2020 (n=2047). Among the factors influencing public attitudes towards NGOs are citizens' understanding of the meaning of social services, awareness of non-state service providers and the opportunities of NGO social service sector. During the COVID-19 pandemic, people tended to resort to online services more often, we assume that this hastened the transition to the online format of interaction in the analyzed field. The revealed relationship of attitudes towards state and non-state type providers has demonstrated that the attitude of citizens towards one type of social service provider has an impact on the formation of attitudes towards another type of provider confirming that public trust is systemic. We have identified the key stereotypes that determine the choice of the type of provider by the recipients of services. It has also been found that the personal experience of interaction with social services organizations plays an important role for establishing trust in state and non-state social services organizations. The dynamics of the public trust in the non-profit sector of social services has been analyzed based on the identification of age subgroups.

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Government Failures in The Implementation of Effective Contracts

Government Failures in The Implementation of Effective Contracts

Journal of Institutional Studies, , Vol. 14 (no. 4),

The paper examines the results of reforms in the remuneration system of university lecturers. Two stages of the transformation process have been considered: the transition to the new remuneration system in 2008 and the introduction of effective contracts in 2012. The paper explains how the political and bureaucratic mechanisms of the formation of the remuneration system have changed. We have made an attempt to describe the government failures in the implementation of effective contracts. It is assumed that the new mechanism remains over-regulated and is based on the idea of the local nature of the academic labor market. The imitation regulation is considered to be one of the most important reasons of the state failures. On the one hand, the government manifested the establishment of understandable and achievable indicators, on the other hand, the authorities failed to solve real problems of the production and transfer of the new knowledge. Governmental stakeholders in education are interested in maintaining and further expanding of their functions. Meanwhile, insufficient professionalism in decision-making and short-termism become the reasons for inefficient waste of budgetary resources for the indicators production and elaboration of various of insurance procedures. The study shows that for many universities the achievement of the target salary level is associated with serious difficulties. There are also significant differences in remuneration systems between universities. Interregional differences in the level of wages of university staff create different conditions for investment in the human capital of university lecturers and incentives for interregional staff turnover that weakens the resource potential of universities in a number of regions.

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The New Education: Controversies and Solutions

The New Education: Controversies and Solutions

Journal of Institutional Studies, , Vol. 14 (no. 4),

The article examines the consequences of the evolution of the national education system as a result and source of ideology, which is formed by two parallel paradigms of the development of modern society and the state – traditional and liberal. In Russian education, these paradigms are constantly changing: from state-bureaucratic socialism in the USSR (1917–1990) and liberal reforms in post-Soviet Russia (1990–2000) to educational counter-reforms of the first twenty years of the 21st century. In modern education, a number of solutions still appear, in which a certain ideological structure is laid. An example of this is the expert report of the Center for Strategic Research and the National Research University Higher School of Economics "Twelve Solutions for a New Education", the main messages of which boil down to reforming the national educational system according to the liberal model. We pay special attention to the controversy of the ideas of the report on the support of "elite" schools instead of solving the current issues of the development of the educational network and infrastructure; on the concentration of methods for solving the problems of teachers in terms of creating conditions for improving their qualifications (ignoring the financial difficulties characteristic of this professional group). Author comes to the conclusion that ideology is important for solving the problems of the education system and its agents, from the standpoint of which the national educational policy is formed. From our point of view, responses to modern challenges to education should provide for the interests and opinions of the scientific and educational community within the framework of “institutional bricolage” (the creation of institutions “from below”, at the expense of the resources of the educational community).

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The Low Effectiveness of Anti-Corruption Measures in Educational Organizations: The Behavioral Aspects

The Low Effectiveness of Anti-Corruption Measures in Educational Organizations: The Behavioral Aspects

Journal of Institutional Studies, , Vol. 14 (no. 4),

Corruption is one of the global problems of humanity, it is the reason for a significant decrease in the efficiency of economic systems. Anti-corruption measures are an important task for any state. However, in practice the anti-corruption policies based on the models of classical law and economics are not effective enough. Using the methodology of behavioral economics, we have made an attempt to improve the classical approach to combating corruption. This article provides an analysis of the factors of corruption, methods of combating corruption, reasons for the low effectiveness of anti-corruption policies on the example of educational organizations. The authors suggest using behavioral economics to improve the classical methods of combating corruption. It is necessary to introduce the concept of hyperbolic discounting and the "present bias" into classical law and economics in order to better understand the impact of anti-corruption policies. We assume that using nudges in practice may enable governments to increase the effectiveness of classical anti-corruption measures.

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Market and State Failures in The Healthcare Model under The COVID-19 Pandemic

Market and State Failures in The Healthcare Model under The COVID-19 Pandemic

Journal of Institutional Studies, , Vol. 14 (no. 4),

The health care market has special features associated with the production of both private and public goods, it has a special structure of competition and transactions. The business models of medical organizations are based on a two-level value proposition – organizations in the analyzed field work for their clients (the population of a territory) and simultaneously for the state, which plays a role of a customer of the public good. This leads to the mixture of the healthcare and insurance markets and, as a result, the development of specific monetization scheme in the field of medical services. The article focuses on market and institutional coordination mechanisms in the Russian healthcare market transformation in the context of the 2020-2022 pandemic. The research methodology is based on neo-institutional economics, theories of industrial markets and the public sector theory. The paper assesses the market failures of the healthcare system and institutional instruments that are designed to neutralize these failures. We also describe the general institutional context of the health care in Russia. The methods of the empirical part of the study are a survey and a narrative analysis. Our results are based on 584 interviews. The respondents assessed changes in the conditions for the provision of medical services in 2020-2022. It was found that the effectiveness of institutional coordination mechanisms in the context of the COVID-19 pandemic were reduced, this resulted in new failures of the state. We prove that a new model in the Russian Federation healthcare market has been created as a result of the pandemic. This model is characterized by a simultaneous strengthening of the role of the state in some market segments and private players in other segments, as well as a decrease in the efficiency of productiono f both private and public goods

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Measures for Limiting Opportunism in The Islamic Banking

Measures for Limiting Opportunism in The Islamic Banking

Journal of Institutional Studies, , Vol. 14 (no. 4),

The article analyzes the sources and manifestations of opportunism, as well as the measures against opportunism in banking. A deep literature review on the problem of opportunism has been carried out. The sources and forms of manifestation of opportunism in Islamic banking have been identified in the paper. The measures against opportunism have been divided into measures to prevent adverse selection and measures to reduce moral hazard. The measures against opportunism specific to Islamic banking have also been described in the article. It is shown that not all common measures to reduce moral hazard have analogues in Islamic banking. Suggestions are made as to which of the Islamic banking-specific measures against opportunism can be borrowed to be exploited in traditional banking. The prospects for the use of smart contracts in Islamic banking as a fundamentally new measure to limit opportunism have been considered. The technical and legal problems of implementing smart contracts as well as the specific problems of implementing smart contracts in Islamic banking are shown. We argue that the widespread introduction of smart contracts is very unlikely in Islamic banking as the principles of smart contracts contradict the principles and spirit of Shariah.

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Adaptive Behavior of Small Business Owners in The Context of The COVID-19 Pandemic

Adaptive Behavior of Small Business Owners in The Context of The COVID-19 Pandemic

Journal of Institutional Studies, , Vol. 14 (no. 4),

Small business survived hard times during 2020–2022. The COVID-19 pandemic resulted in temporary decrease in consumer demand, revenue losses, and bankruptcies. The number of small companies in Russia has dropped dramatically as well as the number of workers engaged in small enterprises. This research aims to reveal major difficulties and institutional barriers small business owners faced during the COVID-19 pandemic. The focus of the research is on patterns of economic behavior Russian entrepreneurs demonstrated adjusting their business processes to the new economic environment. This work is a qualitative research initiative based on a series of in-depth semi-structured interviews with small business owners from the Rostov region, Russia. Interviewing and the following discourses analysis allowed us to understand the meaning and reasoning of small business owners’ behavior. The theoretical framework of the research includes the concepts of institutional economics and the insights from behavioral economics. This “mixed” approach provided us with more opportunities for describing various patterns of economic behavior in the context of fundamental uncertainty. As the pace of institutional change associated with the spread of the virus was very rapid, there was no time for companies to adapt to the new rules. Business owners often resisted changes. The high level of uncertainty became the reason for expectant behavior among small business owners based on the ‘status-quo’ strategy. Even the announcement of high fines did not stop business owners from violating the laws. Explicit opportunism went hand in hand with formal obedience. Despite this, according to official statistics, Russian small business demonstrated high resistance to various economic and social challenges during the pandemic period.

Views: 128

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