IDEAS home Printed from https://ideas.repec.org/a/eee/rujoec/v2y2016i4p349-374.html
   My bibliography  Save this article

Institutional constraints and economic development

Author

Listed:
  • Gurvich, Evsey

Abstract

This article is an attempt to find a grounded answer to the question of why many large-scale economic development programs worked out in Russia from 2000 through 2010 have failed to yield the expected results. To this end, the author has diagnosed the Russian economy, including a comparative analysis against 20 countries at similar levels of development and analyzed both the Russian and global experience in developing and implementing economic programs. The author concludes that the development of the Russian economy is currently hindered by a rigid institutional framework and that growth cannot accelerate without removing it as part of the political process. Based on the analysis of various types of institutional reforms, specific measures are proposed that can ensure the country's evolutional development and can mitigate the economic and social risks threatening Russia if the status quo is maintained.

Suggested Citation

  • Gurvich, Evsey, 2016. "Institutional constraints and economic development," Russian Journal of Economics, Elsevier, vol. 2(4), pages 349-374.
    • Handle: RePEc:eee:rujoec:v:2:y:2016:i:4:p:349-374
    DOI: 10.1016/j.ruje.2016.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2405473916300484
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.ruje.2016.11.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    2. Iwasaki, Ichiro & Maurel, Mathilde & Meunier, Bogdan, 2016. "Firm entry and exit during a crisis period: Evidence from Russian regions," Russian Journal of Economics, Elsevier, vol. 2(2), pages 162-191.
    3. Sergei Guriev & Anton Kolotilin & Konstantin Sonin, 2011. "Determinants of Nationalization in the Oil Sector: A Theory and Evidence from Panel Data," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(2), pages 301-323.
    4. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    5. Daron Acemoglu, 2008. "Oligarchic Versus Democratic Societies," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 1-44, March.
    6. Ebeke, Christian & Omgba, Luc Désiré & Laajaj, Rachid, 2015. "Oil, governance and the (mis)allocation of talent in developing countries," Journal of Development Economics, Elsevier, vol. 114(C), pages 126-141.
    7. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    8. Kudrin, A. & Gurvich, E., 2015. "Government Stimulus or Economic Incentives?," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 179-186.
    9. Cull, Robert & Xu, Lixin Colin, 2005. "Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms," Journal of Financial Economics, Elsevier, vol. 77(1), pages 117-146, July.
    10. A. Kudrin & E. Gurvich., 2014. "A New Growth Model for the Russian Economy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
    11. Edinaldo Tebaldi & Bruce Elmslie, 2013. "Does institutional quality impact innovation? Evidence from cross-country patent grant data," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 887-900, March.
    12. Besley, Timothy & Ghatak, Maitreesh, 2010. "Property Rights and Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4525-4595, Elsevier.
    13. William Easterly, 2008. "Institutions: Top Down or Bottom Up?," American Economic Review, American Economic Association, vol. 98(2), pages 95-99, May.
    14. Andrews,Matt, 2013. "The Limits of Institutional Reform in Development," Cambridge Books, Cambridge University Press, number 9781107016330.
    15. Nunn, Nathan & Trefler, Daniel, 2014. "Domestic Institutions as a Source of Comparative Advantage," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 263-315, Elsevier.
    16. L. Grigoryev & A. Kurdin., 2016. "Unresolved issue of private property legitimacy in Russia," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    17. Kingston, Christopher & Caballero, Gonzalo, 2009. "Comparing theories of institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 5(2), pages 151-180, August.
    18. Francesco Caselli & Nicola Gennaioli, 2008. "Economics and Politics of Alternative Institutional Reforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1197-1250.
    19. Manuel Palma-Rangel, 2006. "Institutions and development in Mexico. Are formal economic reforms enough?," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 21(2), pages 83-103, December.
    20. Baland, Jean-Marie & Moene, Karl Ove & Robinson, James A., 2010. "Governance and Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4597-4656, Elsevier.
    21. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    22. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    23. An, Lian & Kim, Yoonbai & You, Yu, 2016. "Floating exchange rates and macroeconomic independence," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 23-35.
    24. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    25. V. Volkov., 2010. "The Problem of Credible Commitment in the Sphere of Ownership and the Russian Way of Vertical Political Integration," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
    26. Ichiro Iwasaki & Keiko Suganuma, 2015. "Foreign direct investment and regional economic development in Russia: an econometric assessment," Economic Change and Restructuring, Springer, vol. 48(3), pages 209-255, November.
    27. Javorcik, Beata S. & Wei, Shang-Jin, 2009. "Corruption and cross-border investment in emerging markets: Firm-level evidence," Journal of International Money and Finance, Elsevier, vol. 28(4), pages 605-624, June.
    28. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
    29. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634, December.
    30. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    31. Haidar, Jamal Ibrahim, 2009. "Investor protections and economic growth," Economics Letters, Elsevier, vol. 103(1), pages 1-4, April.
    32. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    33. Hans Pitlik & Friedrich Heinemann & Rainer Schweickert, 2014. "Overcoming Reform Resistance and Political Implementation of Large-scale Welfare State Reforms. WWWforEurope Policy Brief No. 3," WIFO Studies, WIFO, number 47232, April.
    34. Seung-Gwang Baek & Doo Yong Yang, 2010. "Institutional Quality, Captal Flight and Capital Flows," Korean Economic Review, Korean Economic Association, vol. 26, pages 121-155.
    35. A. Kudrin & E. Gurvich., 2012. "Population Aging and Risks of Budget Crisis," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    36. I. Chetverikova., 2016. "The effects of liberal reforms in Russian criminal law on conviction and sentencing of economic offenders," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 6.
    37. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
    38. Estrin, Saul & Prevezer, Martha, 2010. "A survey on institutions and new firm entry: How and why do entry rates differ in emerging markets?," Economic Systems, Elsevier, vol. 34(3), pages 289-308, September.
    39. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    40. Sergei Guriev & Konstantin Sonin & Anton Kolotilin, 2007. "Determinants of Expropriation in the Oil Sector: A Theory and Evidence from Panel Data," Working Papers w0115, Center for Economic and Financial Research (CEFIR).
    41. V. Tambovtsev., 2006. "Improvement of Property Rights Protection — Dormant Reserve of Russia’s Economic Growth?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    42. K. Sonin., 2005. "Institutional Theory of Endless Redistribution," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
    43. Chang-Tai Hsieh & Peter J. Klenow, 2010. "Development Accounting," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 207-223, January.
    44. Robert H. Dugger & Angel Ubide, 2004. "Structural Traps, Politics and Monetary Policy," International Finance, Wiley Blackwell, vol. 7(1), pages 85-116, March.
    45. Lin, Chen & Lin, Ping & Song, Frank, 2010. "Property rights protection and corporate R&D: Evidence from China," Journal of Development Economics, Elsevier, vol. 93(1), pages 49-62, September.
    46. Daron Acemoglu & James Robinson, 2010. "The Role of Institutions in Growth and Development," Review of Economics and Institutions, Università di Perugia, vol. 1(2).
    47. E. Gurvich & I. Prilepskiy., 2013. "How to Secure External Sustainability of the Russian Economy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    48. E. Gurvich., 2010. "Natural Rent in the Russian Oil and Gas Sector," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 11.
    49. Dani Rodrik, 2010. "Diagnostics before Prescription," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 33-44, Summer.
    50. Verena Fritz & Kai Kaiser & Brian Levy, 2009. "Problem-Driven Governance and Political Economy Analysis : Good Practice Framework," World Bank Publications - Reports 16777, The World Bank Group.
    51. Pasali, Selahattin Selsah, 2013. "Where is the cheese ? synthesizing a giant literature on causes and consequences of financial sector development," Policy Research Working Paper Series 6655, The World Bank.
    52. E. Vakulenko & E. Gurvich, 2015. "Modeling the Mechanisms of Russian Labour Market," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 11.
    53. Kerekes, Carrie B. & Williamson, Claudia R., 2008. "Unveiling de Soto's mystery: property rights, capital formation, and development," Journal of Institutional Economics, Cambridge University Press, vol. 4(3), pages 299-325, December.
    54. Asoni, Andrea, 2008. "Protection of Property Rights and Growth as Political Equilibria," Working Paper Series 737, Research Institute of Industrial Economics.
    55. Reda Cherif & Mr. Rabah Arezki, 2010. "Development Accounting and the Rise of TFP," IMF Working Papers 2010/101, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mihaela NECULITA, 2018. "Trends of the Russian Economy in the World Economy," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 104-109.
    2. Waliu Olawale Shittu & Hammed Oluwaseyi Musibau & Sodiq Olaiwola Jimoh, 2022. "The complementary roles of human capital and institutional quality on natural resource - FDI—economic growth Nexus in the MENA region," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 7936-7957, June.
    3. Alexander Chepurenko & Maria Kristalova & Michael Wyrwich, 2019. "Historical and Institutional Determinants of Universities’ Role in Fostering Entrepreneurship," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 13(4), pages 48-59.
    4. Andrey Zaytsev, 2020. "Rental Income Structure in Economy as a Basis for Sustainable Agrarian Relations in the Agro-Industrial Complex," Sustainability, MDPI, vol. 12(18), pages 1-20, September.
    5. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    6. Byaro, Mwoyo & Kinyondo, Abel, 2020. "Institutional Quality Explains the Difference of Natural Gas Revenues to Contribute in the Economy: Empirical Evidence from Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 8(3), November.
    7. Oluwaseyi Musibau, Hammed & Olawale Shittu, Waliu & Yanotti, Maria, 2022. "Natural resources endowment: What more does West Africa need in order to grow?," Resources Policy, Elsevier, vol. 77(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. ROUGIER Eric, 2015. ""The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA (2007-2019) 2015-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    2. Fang, Tian Jin & Han, Jianlei & He, Jing & Shi, Jing, 2021. "Property rights protection and mergers and acquisitions," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    3. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    4. Braunfels, Elias, 2016. "Further Unbundling Institutions," Discussion Paper Series in Economics 13/2016, Norwegian School of Economics, Department of Economics.
    5. Berggren, Niclas & Bjã˜Rnskov, Christian, 2013. "Does religiosity promote property rights and the rule of law?," Journal of Institutional Economics, Cambridge University Press, vol. 9(2), pages 161-185, June.
    6. Mendoza, Ronald U. & Canare, Tristan A. & Ang, Alvin, 2015. "Doing Business: A Review of Literature and Its Role in APEC 2015," Research Paper Series DP 2015-37, Philippine Institute for Development Studies.
    7. Haggard, Stephan & Tiede, Lydia, 2011. "The Rule of Law and Economic Growth: Where are We?," World Development, Elsevier, vol. 39(5), pages 673-685, May.
    8. Ang, Alvin & Mendoza, Ronald U. & Canare, Tristan A., 2015. "Doing Business: A Review of Literature and Its Role in APEC 2015," Discussion Papers DP 2015-37, Philippine Institute for Development Studies.
    9. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    10. Ng, Travis & Yu, Linhui, 2014. "Which types of institutions hinder productivity among private manufacturing firms in China?," China Economic Review, Elsevier, vol. 31(C), pages 17-31.
    11. Rok Spruk & Mitja Kovac, 2018. "Inefficient Growth," Review of Economics and Institutions, Università di Perugia, vol. 9(2).
    12. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    13. Van Noort, S., 2017. "Causes and Effects of Private Property Rights Security," Cambridge Working Papers in Economics 1746, Faculty of Economics, University of Cambridge.
    14. Nicolas Ziebarth, 2013. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 86-99, January.
    15. Trung V. Vu, 2022. "Does institutional quality foster economic complexity? The fundamental drivers of productive capabilities," Empirical Economics, Springer, vol. 63(3), pages 1571-1604, September.
    16. Christian Bjørnskov, 2015. "Constitutional property rights protection and economic growth: evidence from the post-communist transition," Constitutional Political Economy, Springer, vol. 26(3), pages 247-280, September.
    17. Beck, T.H.L., 2010. "Legal Institutions and Economic Development," Other publications TiSEM 8aa07b48-ce55-4cf6-8754-7, Tilburg University, School of Economics and Management.
    18. Wang, Cong, 2013. "Can institutions explain cross country differences in innovative activity?," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 128-145.
    19. Williamson, Claudia R., 2012. "Dignity and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 763-771.
    20. Slesman, Ly & Baharumshah, Ahmad Zubaidi & Ra'ees, Wahabuddin, 2015. "Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC)," Economic Modelling, Elsevier, vol. 51(C), pages 214-226.

    More about this item

    Keywords

    economic reforms; economic programs; institutions; growth diagnostics;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rujoec:v:2:y:2016:i:4:p:349-374. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/russian-journal-of-economics .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.