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Modern Approaches to Measuring the State Sector: Methodology and Empirics

Author

Listed:
  • Abramov, Alexander E.

    (Russian Presidential Academy of National Economy and Public Administration)

  • Aksenov, Ivan V.

    (Russian Presidential Academy of National Economy and Public Administration)

  • Radygin, Alexander D.

    (Russian Presidential Academy of National Economy and Public Administration)

  • Chernova, Maria I.

    () (Russian Presidential Academy of National Economy and Public Administration)

Abstract

This article attempts to estimate the scale of state participation in the Russian economy in temporal dynamics and in comparison with other countries. Our unique methodology suggests a set of alternative approaches to measuring 3 independent components: stateowned enterprises (SOEs), state unitary enterprises and the public administration sector. Our results reveal growth of state involvement in the economy up to 46% of GDP in 2016. The share of SOEs and public administration in GDP rose from 20.2% and 16.9% in 2006 to 25.3% and 19.2% in 2016, respectively, by conservative estimates. A crosscountry comparison suggests that market capitalization, employment and SOEs’ share in GDP are significant and increasing. The share of public administration corresponds to the same estimate for OECD countries, but it is also increasing. The total state share and its growth can be evidence of an alarming trend for the Russian economy. It is 6%-12% higher than the estimate for most developing countries and, unlike in China or India, it keeps growing. This leads to state expansion in the economy, growth of state influence on SOEs and a transfer of noneconomic risks to SOEs. Apart from increasing state involvement in added value creation, the state plays an active role in reallocation of financial resources, and there is some evidence that it is even more significant than the state share in creating added value measured by GDP.

Suggested Citation

  • Abramov, Alexander E. & Aksenov, Ivan V. & Radygin, Alexander D. & Chernova, Maria I., 2018. "Modern Approaches to Measuring the State Sector: Methodology and Empirics," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 36-69, February.
  • Handle: RePEc:rnp:ecopol:ep1802
    as

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    References listed on IDEAS

    as
    1. Haiyan Ding & Hui He, 2018. "A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986-2009," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 106-137, July.
    2. Hans Christiansen, 2011. "The Size and Composition of the SOE Sector in OECD Countries," OECD Corporate Governance Working Papers 5, OECD Publishing.
    3. A. Radygin & Y. Simachev & R. Entov., 2015. "State-Owned Company: Detection Zone of Government Failure or Market Failure?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    4. World Bank Group, 2014. "Corporate Governance of State-Owned Enterprises : A Toolkit," World Bank Publications, The World Bank, number 20390.
    5. Abramov, Alexander & Radygin, Alexander & Chernova, Maria, 2017. "State-owned enterprises in the Russian market: Ownership structure and their role in the economy," Russian Journal of Economics, Elsevier, vol. 3(1), pages 1-23.
    6. repec:nos:voprec:2017-04-1 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    state ownership; state-owned enterprises; public administration sector; state share in GDP.;

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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