Evolution of Corporate Governance in Russia: Governmental Policy vs Real Incentives of Economic Agents

Corporate governance mechanisms in Russia are the result of a large-scale institutional experiment performed by the Russian government in the early 1990s with vigorous support of international financial institutions. The purpose of this experiment was to bring a certain a priori defined model of interaction between enterprises and investors, owners and managers to the Russian environment. The logic of law making -from defining a general privatization framework to specific activities to develop stock market infrastructure — was strongly influenced by the idea to create this model. Multi-billion loans were extended to the Russian government by the World Bank and International Monetary Fund (IMF) to pursue these objectives. Leading Russian reformers and many foreign consultants were involved in practical implementation of this model. And until the middle of the 1990s, despite all inconsistency of the Russian government’s economic policy in the other areas, its activities in terms of institutional reform, especially the launch and implementation of the mass privatization, were very highly estimated (Åslund, 1995; Radygin, 1995, etc.). Besides, many experts believed that speed of implementing would compensate for the shortfalls in the institutional design of reforms. In particular, speed of privatization was thought to be critical to ensure that market reforms would be irreversible (Boycko et al., 1995).