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Seductions of An Underdevelopment Trap

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  • Dmitry Gershenson
  • Maria Amelina
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    Abstract

    Despite ambitious agricultural reforms initiated by the federal government, inefficient and unprofitable producers predominate in post-Soviet Russia. However, in some regions a more robust restructuring has taken place. Observing two Russian regions-one with substantially restructured agricultural production, and one in which Soviet-style coordination predominates-we develop a model of the interactions between political and economic incentives that lead to these divergent outcomes. The model identifies region- and sector-specific characteristics that encourage some regional governments to maintain Soviet-style redistribution structures and make producers forsake more efficient outcomes as more costly, while encouraging other regions to pursue reform.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/126.

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    Length: 35
    Date of creation: 01 Jul 2002
    Date of revision:
    Handle: RePEc:imf:imfwpa:02/126

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    Related research

    Keywords: Agriculture; subsidy; farms; farm; collective farms; collective farm; subsidies; subsidization; farm employees; farming; farm manager; farm income; farm employment; peasant farms; poultry farm; farm managers; farm management;

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    1. Ilya R. Segal, 1998. "Monopoly and Soft Budget Constraint," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 596-609, Autumn.
    2. Raghuram G. Rajan & Luigi Zingales, 1998. "Power In A Theory Of The Firm," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(2), pages 387-432, May.
    3. David Epstein & Peter Tillack, 1999. "How Russian Agricultural Enterprises Are Surviving: The Financial Status of Large Agricultural Enterprises in the St. Petersburg Region," Eastern European Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 37(5), pages 52-92, October.
    4. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," William Davidson Institute Working Papers Series 38, William Davidson Institute at the University of Michigan.
    5. Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 995-1025, November.
    6. Galbi, Douglas, 1995. "The significance of credits and subsidies in Russian agricultural reform," Policy Research Working Paper Series 1441, The World Bank.
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