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2017, Issue 3 (35). Abstracts
Political Economy of Institutions and Development: The Importance of Being Inclusive Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part II. Institutional Change and Implications for Russia We discuss the evolving views on institutions and development in modern political economy, and in particular the contribution to the field by D. Acemoglu and J. Robinson, explaining root causes of successes and failures in economic development. The focus of discussion is on inclusive and extractive institutional regimes — the former sustain economic growth, whereas the latter enable the elites to expropriate the rest of society. Although extractive institutions are inefficient and obstruct development, they are preferred by the elites and hence can be reproduced over long periods of time in vicious circles of economic and political inequality. We apply the above concepts and views to the post-Soviet period of the Russian history, where the market reforms of the early 1990s became a "critical juncture" which has shaped Russia’s institutional regime for decades to come. It is argued that suppression of social participation and control at the time of market reforms in Russia has had long-term institutional legacy and resulted in the emergence and persistence of extractive institutions in post-communist Russia. The interplay between institutions and cultural change is discussed. Key words: inclusive and extractive institutions, critical junctures, political economy of institutions and development
Statistical Procedures for Stock Markets Network Structures Identification Network (graphical) model of stock market is a complete weighted graph. Nodes of the graph corresponds to the stocks and weights of edges are given by some measure of dependence between characteristics of the stocks. The most common characteristic of stocks is their return. In the analysis of network (graphical) models of returns of primary interest are network structures (subgraphs of a complete graph), containing key information about the considered network. Popular network structures are the minimum spanning tree, planar maximally filtered graph, market graph, a cliques and an independent set of the market graph. The problem of identification of network structure is to define the structure from observations. An important characteristic of identification statistical procedure is its uncertainty related with finite sample size. Significant role in this play the joint distribution of returns and the choice of measures of dependence between them. The most common measure of dependence is Pearson’s correlation. A wide class of joint distributions of stock returns is represented by elliptical models. However, the procedures based on Pearson correlations are non robust when the joint distribution of returns is deviated from the normal in the class of elliptical distributions. The aim of this work is to present a general approach to construction of robust (distribution free) statistical procedures of identification of network structures. It is proposed to use the probability of sign coincidence of stock returns as a measure of dependence. It is shown that the single-step and stepwise standard procedure of identification of network structures based on the probability of sign coincidence are robust in the class of elliptical distributions. It allows to recommend these procedures for practical applications. Key words: financial market, network (graphical) model, network structure, Pearson correlation, probability of sign coincidence
A Basic Neomarxist Model of Economic Fluctuations The world economic and financial crisis has revealed the weakness of modern economics mainstream theories and the related models in explaining the capitalist economy dynamics. These are first of all real business cycles and New Keynesian dynamic stochastic general equilibrium models. They treat economic fluctuations as a result of unexpected shocks. The Marx’s reproduction theory can become an alternative as it analyses cyclicality as an immanent feature of the capitalist mode of production arising from fundamental contradictions between labour and capital. Some of its concepts have been formalized in the predator-prey "Class-Struggle Model" by R. Goodwin. The model was a theoretical tool to investigate interactions between changes in employment rate (a labour market indicator) and share of labour in national income (representing a distribution of the value produced between workers and capitalists). Nevertheless, nor it neither subsequent modifications were empirically valid. Researchers who tried to verify the models by bringing them to data have pointed to a misspecification as a possible reason. To our mind, the point is that the models by R. Goodwin and his disciples reflect a distributive conflict between labour and capital which is subordinate to the main contradiction regarding production relations. The article states a prey-predator type model version based on the reproduction theory by K. Marx. The variables are productive capital and surplus value which change in time along damped oscillations trajectories. Within the present framework the economic dynamics is seen as a subsequence of damped fluctuations each of which is characterised by own specific parameters (amplitude, duration), which in turn depend on fostered innovations and their diffusion in the economy. Key words: economic dynamics, theory of reproduction, Marx models of cycle, predatorprey model
Yu.N. Perevyshin, Center for the Study of Central Banks, Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia The Price Convergence of Individual Goods in the Russian Regions This paper describes testing the law of one price in 76 Russian regions for 69 goods belonging to a fixed set of goods and services, on the monthly data for the period from 2003 to 2015. To test the law of a one price, the approaches associated with testing the nonstationarity of panel data are applied. The literature devoted to statistical methods for panel unit roots is reviewed. The problem of cross-sectional correlation across time series and its influence on the statistical tests is discussed and various methods are proposed for taking into account this correlation. We review econometric papers in which methods for determining the proportion of stationary and non-stationary time series in a panel are proposed. These methods are robust to cross-sectional correlation. For Russian regional data, the modern tests for panel unit roots, which take into account the cross-sectional correlation between time series and allow to determine the fraction of stationary time series in the panel are applied. First, the data are tested for panel unit roots, and then the proportion of the time series in the panel are estimated. The results show the evidence in favor of the law of one price for most food products, medicines, household chemicals and some of the services provided by public companies. The relative prices of vegetables, cereals and gasoline are stationary in more than 70% of the regions. Violation of the law of one price is typical for garments, footwear, furniture, services provided by private companies. The reason is the heterogeneity of functional and consumer properties of the products in the regional context. Key words: law of one price, panel unit root tests, regional price differences, relative price level, price convergence
Employment in the North of Russia: Microdata Analysis In the North of Russia employment and migration are closely related. The reduction in population and employment in the northern regions of the Russian Federation for more than two decades together with the high economic potential of the Russian North seems to be paradoxical. Perhaps this situation is related to the mismatch in demand and supply of labor in the northern regions of Russia. The model of the local labor market equilibrium and the theory of compensating differentials predict higher wages in the amenity-poor regions. It means that less qualified workers can earn more in the High North compared with the other regions of the country. The hypothesis was that less qualified employees have higher probability of being employed in the High North regions of Russia than in the rest of the country. Using the binary logit models, probabilities of being employed in the North of Russia and the rest of the country were estimated at the base of microdata of the Survey of the Labour Force, provided by the Federal State Statistics Service. The results showed that the population in the High North regions of Russia is more economically active compared with the rest of the country, what is especially true for women. The working age and professional education make the highest marginal effects in the North and the rest of the Russian Federation. Secondary and tertiary education increases, while primary education reduces, the probability of being employed in the High North regions of Russia compared with the rest of the country. Key words: employment, labor demand, labor supply, migration, labour market, logit analysis, Russian North, Russian Arctic
The Production Potential of the Modern Russian Penitentiary System: The State and Development Measures In the article, based on a continuous analysis of officially published data on production and economic activities of the Federal Penitentiary Service (FSIN), FSIN directorates for the subjects of the federation and correctional institutions, a comprehensive study of the current state of the production potential of the penitentiary system including its productive forces has been conducted. A number of key macro- and microeconomic problems were identified: low transparency of production and economic activities of the FSIN; underloading of existing production facilities; A low level of information for potential business partners about the production capabilities of the FSIN institutions; insufficient effectiveness of economic management in correctional colonies; difficulty in implementing business initiatives of convicts; insufficient level of nutrition of productive workers. A number of practical measures for development of production potential are proposed: introduction of periodic public reporting of correctional facilities on social and production aspects of their activity; continuous audit of available production resources and public distribution of its results; adoption of regulations for cooperation between entrepreneurs who organized production in correctional colonies, administration and convicts; creation of industrial penitentiary parks; assistance in realization of business ideas of convicts, activation of agricultural work in correctional colonies, conducting of marketing self-examination; the creation of a single online store of the Federal Penitentiary Service, the holding of centralized campaigns to promote products produced in correctional colonies. Key words: economics of the penal system, penitentiary, convicts’ labour, prison labour, work in prison
Development of the Patent-Based Researches on Innovation Processes: Analytic Review The article provides a review of the key research papers and articles dedicated to studying patents as economic category, as well as scientific publications using patent data in quantitative economic analysis. The author defines the following primary areas of research: the economic value of patents, sectoral studies and international comparisons. Findings obtained by the main quantitative methods, used in patent statistics studies are analyzed. It is demonstrated that for the last 60 years patents had been used in economic researches at the firm level, as well as in sectoral and national studies, including intersectoral and international comparisons. In methodology of the economic research on the base of patent data a shift took place from the simple quantitative methods to the more sophisticated ones, notably to the regression analysis. Some specialized quantitative methods used in such research papers alongside with regression analysis and in addition to it are identified. In particular gravity model, Cox proportional hazard model, Poisson regression model and CDM model were involved in patent data studies. It was found out that the some modern publications on that subject, using advanced quantitative methods, contributed to the gradual coping with persistent problems concerning qualitative assessment of the patent data. Key words: patent statistics, innovation economy, research methodology, correlation analysis, regression-based analyses
Theory of Competition for Economic Policy In Russia, there is already strong tradition to apply macroeconomic models and institutional analysis in order to assess the effects of recent and prospective reforms. One rarely applies microeconomic models for this objective, in spite of the fact that impact of prospective reforms on the incentives of market participants might be substantial. An article lists three examples of economic policy issues, where microeconomic analysis might explain important effects of reforms. These are price remedies for large exporting companies, alternative methods of tariff regulation and models of procurement, and liberalization of domestic natural gas market. In the first and the third case the rules that were designed to enhance consumer benefits and promote competition, paradoxically can support anticompetitive market strategies. In the second case, the intention to narrow the rules of procurement in favor of more competitive ones, is able to suppress the incentives to increase productivity that is the basis for competition. Key words: microeconomics, price remedies, tariff regulation, public procurement, liberalization of domestic gas market
Institutions Designing — Theories and Interests The author discusses the significance of outcomes of economics achievements for social wellbeing growth from the perspective of institutions designing. There are many examples confirming the opportunity to use these theoretical results in applied issues of social and economic development. However, there are no guarantees that these results will be used for social wellbeing growth. The reason is not only complex interaction of interests groups sensitive to distributive aspects of probable changes, as well as competing research programs in economic science suggesting alternative ways of problems solutions. The reason is also of filters’ imperfections within the system "economic science — policy" – syntactic, semantic and pragmatic. One of indicators of demand for economic studies’ results is reflected in the designed institutional changes. In particular, it is reflected in regulatory impact assessment. The problem of inelasticity of internal supply of ideas related to syndrome of two discourses is also discussed. Key words: interests, designed institutions, economic science, two discourses
Strategy-2035: Preliminary Hypotheses Within the framework of the implementation of the Federal Law (28 June 2014 No. 172-FL) "On Strategic Planning of the Russian Federation", a draft of the Strategy for the Socio-Economic Development of Russia until 2035 is currently under development. The article proposes two hypotheses for the success of the Strategy, the first of which is the need to build the image of the desired future, taking into account the reality of its implementation, the second — to consider the sociocultural characteristics of society. Based on the conducted research and polls made in 2015—2017, the author draws a conclusion about the discrepancy between the image of the desired future and the sociocultural portrait of society and suggests ways of solving this situation — through reaching the trajectory of longterm movement. Key words: development strategy, institutional changes, sociocultural characteristics, informal institutions
Transforming Research Results into Policy Advice: Political Economy Perspective Transformation of research results into policy advice is a challenging business for economists. Most of them are often deeply disappointed by the fact that politicians and bureaucrats ignore recommendations designed to maximize the social welfare. This does not mean, however, that political decision makers are irrational. Rather, political economy argument is that they rationally pay more attention to their own interests as compared with the social welfare. The article argues that the optimal policy advice strategy should rely on the analysis of decision makers’ utility functions. The outcome of this analysis is a set of recommendations that are the most economically efficient of those that can be implemented in political equilibrium. Key words: policy advice, well-being economics, public choice theory, new political economy, political economics, endogenous policy theory
Designing the Strategies for Socio-Economic Development: Science vs. Ideology Strategies for socio-economic development in "catching-up" countries are designed on the basis of ideologies dominated in the society and, as a rule, fail. Until recently, economic science could not offer an alternative basis for designing strategies, but over the past twenty years the situation has changed. Nevertheless, scientific results are still weakly demanded by society. In this paper, the conflict between economics and dominant ideology is explored. On the one hand, ideology restrains the development of scientific research, and on the other hand it is changing under its influence. However, these changes are very slow for a number of reasons, analyzed in the paper. Ideology is inevitably connected with the interests of economic agents. The old elite prevents the emergence of a new ideology, since new concepts reveal the mistakes of past projects. In addition, the implementation of new ideas may require institutional changes that weaken the power of existing high-ranking officials. Meanwhile, in modern societies there are no regular mechanisms providing such transformations, and the probability of rational volitional decisions, which confront the dominant ideology, is small. Key words: catching-up development, radicalism, Washington Consensus, gradualism, institutional reform, interim institution Back | ||
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