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Industrial Defense Enterprises in the Russian Transition to a Capitalist System: Institutional Restrictions on Development


  • Leonid KOSALS

    (State University-Higher School of Economics, Russia)


The author develops the concept of 'clan capitalism' that has emerged in Russia during a period of transition. Clan capitalism has led to certain institutional restrictions on business activity: informal rules becoming more important than formal norms, etc. As well as establishing the limits for growth; such restrictions also prevent the widespread uptake of effective business strategies. The author studied the consequences of clan capitalism in Russia; citing the case of the industrial defense enterprises and analyzing trends in their performance over the last decade through a longitudinal survey of top managers. This paper describes the current development in this sector as contradictory growth due to the lack of investment and innovation but caused by a rise in the state order. The author explains the peculiarities of this growth by illustrating restrictions within the system of clan capitalism.

Suggested Citation

  • Leonid KOSALS, 2005. "Industrial Defense Enterprises in the Russian Transition to a Capitalist System: Institutional Restrictions on Development," The Journal of Comparative Economic Studies (JCES), The Japanese Society for Comparative Economic Studies (JSCES), vol. 1, pages 11-23, July.
  • Handle: RePEc:cos:epaper:v:1:y:2005:p:11-23

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    References listed on IDEAS

    1. Marin, Dalia, 2000. "Trust vs Illusion: What is driving Demonetization in Russia?," Discussion Papers in Economics 73, University of Munich, Department of Economics.
    2. Enste, Dominik & Schneider, Friedrich, 1998. "Increasing Shadow Economies all over the World - Fiction or Reality?," IZA Discussion Papers 26, Institute for the Study of Labor (IZA).
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    More about this item


    Russia; Transition; Clan capitalism; Institutional restriction on development; Industrial defense enterprise;

    JEL classification:

    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions


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