IDEAS home Printed from
   My bibliography  Save this paper

Government Financial Transfers and Enterprise Adjustments in Russia


  • M Schaffer


This paper analyses the adjustments of state-owned enterprises in Russia to the economic reforms started in early 1992, drawing on evidence from enterprise visits, larger enterprise surveys, and aggregate data on the enterprise sector, and making direct comparisons to comparable experiences in Poland, Hungary and the (former) CSFR, the leaders in transition from socialism in Central and Eastern Europe (CEE). We find that enterprise adjustment in Russia has broadly followed the pattern observed in the leading CEE economies in transition. Demand and output have dropped, and many enterprises have changed their product mix in response without substantial new investment; firms are looking for new customers, though progress in terms of exports is still limited; they are containing wage costs and shedding labour, albeit more slowly than firms in the CEE countries; the levels of interenterprise credit (payables and receivables) has increased but has stabilized at levels comparable to those observed both in other transition countries as well as in West European economies; enterprises have been moving payment methods and avoiding extending trade credit if possible. However, there are also signs that adjustment in the enterprise sector is uneven, that the overall pace of adjustment is low by CEE standards, and that governmental transfers are behind this. Whereas financial environment of enterprises is still soft, and the state is the source of this softness. The financial transfers to enterprises take two forms: subsidies, and directed credits. The case of directed state credits is analyzed in some detail, and evidence is presented suggesting that they are allocated accordingly to "need" meaning that the recipient enterprise is in financial difficulties and/or it is politically important.

Suggested Citation

  • M Schaffer, 1994. "Government Financial Transfers and Enterprise Adjustments in Russia," CEP Discussion Papers dp0191, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0191

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.


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

    Cited by:

    1. Lücke, Matthias, 1994. "Beschäftigungsstruktur und realwirtschaftliche Anpassung in der ehemaligen Sowjetunion," Open Access Publications from Kiel Institute for the World Economy 1614, Kiel Institute for the World Economy (IfW).
    2. Lehmann,Hartmut, 1995. "Active labor market policies in the OECD and in selected transition economies," Policy Research Working Paper Series 1502, The World Bank.
    3. Stanislaw Gomulka, 1994. "Lessons from Economic Transformation and the Road Forward," CASE Network Studies and Analyses 0017, CASE-Center for Social and Economic Research.
    4. Freinkman, Lev & Haney, Michael, 1997. "What affects the Russian regional governments'propensity to subsidize?," Policy Research Working Paper Series 1818, The World Bank.

    More about this item


    Access and download statistics


    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:cep:cepdps:dp0191. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.