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Local government and small business:mismatch of expectations


  • Juri Plusnin

    () (National Research University Higher School of Economics. Faculty of Public Administration. Professor)

  • Jaroslav Slobodskoy-Plusnin

    () (Russian Academy of Sciences. Institute of Higher Nervous Activity and Neurophysiology. Researcher;)


The article summarizes the data from a few tens of interviews with entrepreneurs – representatives of a small business. The purpose of the interview was to discover expectations and suggestions from entrepreneurs to the local and state government. Interview data reveal the profound contradictions between the business and the authorities. These contradictions are based not only on results of the local administration’s actions, but also on the specific current status of local (self-)government that makes it impossible to effectively interact with the business. On the other hand, the development of local businesses has led to a peculiar configuration of the business community, also making it difficult to communicate with the authorities. As a result is trying to get protection from the local government that leads to inadmissible merging of business and government and monopolizing of business in almost every district. Direct consequences of such a merging are government inefficiency, lack of incentives for business development, and stagnation. Some “evolutionary stable strategy” has been developed, that does not allow winning any of the actors yet saving them from loses in competition with the outside players. Understanding of the inefficiency and dead-end of such an interaction by some entrepreneurs forces them to raise claims to local authority. Interviews analyses resulted in the list of complaints and suggestions on how to optimize an interaction between the local business and local authorities

Suggested Citation

  • Juri Plusnin & Jaroslav Slobodskoy-Plusnin, 2013. "Local government and small business:mismatch of expectations," HSE Working papers WP BRP 04/PA/2013, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:04/pa/2013

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    References listed on IDEAS

    1. John Connor, 2006. "Effectiveness of Antitrust Sanctions on Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 195-223, December.
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    3. Svetlana Avdasheva & Andrey Shastitko, 2012. "Rules on Retailer-Supplier Relationships in the Competition Policy of the Russian Federation: How and Why Misunderstanding Economics Threatens the Competitiveness of the Sector," Antitrust Chronicle, Competition Policy International, vol. 7.
    4. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
    5. Nuno Garoupa & Matteo Rizzolli, 2012. "Wrongful Convictions Do Lower Deterrence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(2), pages 224-231, June.
    6. Mann, Jeoffrey & Wright, Joshua, 2010. "Innovation and the Limits of antitrust," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 99-123.
    7. Svetlana Avdasheva & Andrei Shastitko, 2011. "Russian anti-trust policy: power of enforcement versus quality of rules," Post-Communist Economies, Taylor & Francis Journals, vol. 23(4), pages 493-505, June.
    8. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
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    More about this item


    municipal government; local self-government; small business; business-government interactions; partnership between municipality and business.;

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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