HSE’s 12 Most Interesting Research Papers of 2012 in English and Russian

Deals on government commissions, the anti-corruption declaration, job creators and job destroyers, trust, talent and institutions, the economy of Runet, the Russian internet; the most curious and useful research for economic policy carried out by HSE over the last year.

Disclaimer: Interest is a subjective concept and no two lists of what purports to be interesting will be the same. We have chosen publications which we think could be comprehensible, curious and useful for experts in connected fields, civil servants working in the social-economic sphere, and for anyone who is interested in economic and social problems, -in short, for qualified general readers.  Four of the twelve publications are in English.

 

1. On working out a system for anti-corruption declarations in Russia – Alexei Konov, Andrei Yakovlev. О развитии системы антикоррупционного декларирования в России

In the fight against corruption it’s essential to have an income declaration for government officials and civil servants. But almost everything about the Russian declaration system is wrong. As it is at the moment, it cannot be used as an instrument to battle with corruption. The law passed by the state Duma on monitoring expenditure doesn’t change anything either. Konov and Yakovlev show how an effective declaration system and a system to verify it could be built, what kind of sanctions there should be for public servants, and what rights should be given to civil anti-corruption organisations. They use rare examples of economic research work which show exactly how the system of regulation needs to be changed.     

2. Scenarios for Russia in the long-term. A new impulse after two decades – Evgeniy Yasin. Сценарии для России на долгосрочную перспективу. Новый импульс через два десятилетия

Exactly twenty years after the beginning of market reforms, in December 2011 Russians showed a renewed taste for democracy. After a long postponement, a scenario for democratisation and radical institutional transformation once again was on the cards. This will help society, government and business to escape the triangle of distrust which prohibits the possibility of change. Yasin presents possible scenarios and stages for gradual or radical transformation. He shows clearly why dialogue was impossible between the government and the opposition in 2012. Yasin believes that it is crucial for Russia to make the transition from a closed to an open society in the next few years. Douglas North writes about how this can happen in his paper “In the Shadow of Violence” – В тени насилия which was presented at the HSE April Conference. (A shorter version of it is available on the HSE portal OPEC.ru)

 

3. The movement of employment in the Russian economy; in search of constructive destruction – Vladimir Gimpelson, Rostislav Kapelyushnikov, Zinaida Ryzhnikov. Движение рабочих мест в российской экономике: в поисках созидательного разрушения

The creation of new, and loss of old, forms of employment is generally accepted as an indicator of the state of the economy. It’s almost impossible to apply it in Russia though, because of the obsolete methods of the Russian Statistics Office. This paper shows how methods should be corrected and makes the first evaluation of the pace of job creation and loss in industry and in the regions. In a year about 7 -8 million jobs have been redefined out of the 37-39 million in large and medium-sized ventures. Job losses (in 2009-2010) steadily dominated over job creation; traditional employment sectors are shrinking and modernisation is slow. The number of new jobs is growing mainly in trade, construction and government administration (!!). In 2008-2010 an average of 10.2% per year of new jobs were created in the latter, mainly through enlargement of already existing enterprises. The difference between job creation and loss was only positive in 2008-2010 in the three areas mentioned. Education and medicine were lagging behind in job creation and the areas with most job losses were farming and processing industries. These dynamics are caused by shrinkage in the formal sector and growth in informal kinds of employment. To find out more about this, see Gimpelson and Kapelyushnikov’s other work “Is it normal to be informal”?  «Нормально ли быть неформальным?» which can be found in a shortened version in OPEC.ru

 

4. The Economics of Runet, the Russian internet, 2011-2012 – Sergei Davydov, Ilya Kiriya and others. Экономика Рунета 2011-2012  

This is the first comprehensive analysis of the online economy in Russia. It evaluates the scale and rate of growth of the 11 Russian internet markets. The sum volume of those markets (the largest are retail and electronic payments) reached about 554 billion roubles in 2011 and 30% more in 2012. Information about the research is available on the OPEC.ru website.

 

5. How much is human capital worth in Russia? – Rostislav Kapelyushnikov. Сколько стоит человеческий капитал в России?

Kapelyushnikov has applied a generally accepted method of measuring human capital (Jorgenson-Fraumeni) to the Russian accumulation. He found it to be worth 600 trillion roubles in 2010, or 6 million roubles per capita (almost 4,000 USD according to PPP). Over the last decade, the capital has doubled. Growth is hindered by an aging population but underpinned by improving employment rates, a lowering of the mortality rate, wage increases and better educated youth. Human capital is spread unevenly through the population. Compared to the USA, in Russia capital is strongly biased towards the educated younger generation. See article for more details;  «Опережающий рост человеческого капитала».

 

6. Possibilities for horizontal and vertical coordination in state purchasing; an analysis – Anna Balsevich and others. Возможности горизонтальной и вертикальной координации при осуществлении государственных закупок: анализ ситуаций

Looking at three examples (pharmaceutical markets, road building and purchasing oil products) Balsevich shows why the current laws on state purchasing do not prevent deals between suppliers and between commissioners and suppliers. She describes how the possibility of a deal influences the structure of the market and the links between commissioners and suppliers, etc. The rules of trading allow both sides not only to make deals but also to realise effective systems of punishment for those who refuse to take part in this “cooperative” strategy.

 

7. IN ENGLISH: Institutions and the allocation of talent by Timur Natkhov and Leonid Polishchuk

In countries where the markets are supported by institutions, talented people want to get involved in some kind of productive work. Where the institutes that support markets are not developed, those same talented people will seek out employment and professions that are not so demanding but will given them some financial return. The level of institutional development will determine the decisions people make about investment in human capital as well. Natkhov and Polishchuk found that data from 95 countries showed that the quality of institutions influences the choices of job applicants. In developed countries, natural sciences are popular with talented graduates whereas in countries with weak institutions, they tend to go for jobs in the legal profession.

Another report on research that Polishchuk took part in, on the problems of how social capital effects behaviour, shows that it affects the way people drive and plays a role in avoiding accidents and traffic jams.     

 

8. IN ENGLISH: Explaining the productivity advantages of manufacturing firms in Russian urban agglomerations by Kseniya Gonchar & Tatiana Ratnikova

This work shows how important the city premium is – how much more productive manufacturing business can be in a city. It shows that productivity rises by 17-21% compared to levels in the countryside. It is particularly noticeable in small cities of 100-250,000. Clustering and concentration doesn’t really add to the city premium of a big city, but it does make a difference in the regions. The city premium can double if the region is open for trade. The city premium is an important concept in urban studies and this particular work is one of the first to apply it to research in Russia. 

 

9. On major trends in government spending policy 2013-2015 by Natalya Akindinova and others. Об основных направлениях бюджетной политики на 2013-2015 гг.

This work picks up on research which began during work on “Strategy 2020” to think of essential variations and alternatives to budget policy. An idea was formulated in “Strategy 2020” of the “budgetary manoeuvre” to make more money available for spending on health care, education, science and road building by cutting government spending on the army and the power ministries. But the document quickly prepared by the Ministry of Finance “Main directives” and then the budget plan for 2013 and the following year showed that the government was not inclined to follow the recommendations. The Ministry of Finance, as usual, reduced its forecast for increases in the budget and thus narrowed the room for budgetary manoeuvres. But an increase in government spending completely contradicts the priorities of the “Strategy” – accelerated increase on defence spending and on law-enforcement and a more than measured growth in spending on human capital. Subsequently, this was put right to some degree at a discussion of the 2013 budget, by an increase, though not radical, in spending on human capital.

 

10. Are Russian public sector workers “suckers”? An analysis of wage differences by Anna Sharunina. Является ли российский «бюджетник» «неудачником»? Анализ межсекторных различий в оплате труда

On average, Russian public sector employees earn about 30-40% less than those in the private sector. Their colleagues in the USA and Western Europe, on the contrary, earn 5% more and in some developing countries, the premium on public sector pay is even higher. So, are Russian public sector workers suckers? Sharunina shows that public sector workers would receive 28.5% higher wages if they worked in the private sector. But the gap is slowly narrowing. Besides, public sector workers have access to non-financial bonuses more often than their fellows in the private sector. But this doesn’t compensate for under payment. For more details, see the article – Public sector workers do better than their colleagues in the private sector in everything but salaries «Бюджетники превосходят коллег из частного сектора во всем, кроме зарплаты».

 

11. IN ENGLISH: Within and between-country value diversity in Europe: latent class analysis by Vladimir Magun and Maksim Rudnyev

Magun and Rudnyev divided Europeans into three groups depending on whether they were committed to a value system of following orders from “above”, either in a religious or secular sense, or to a system of taking initiatives and acting in the spirit of solidarity. Russia’s score on this scale is certainly uninspiring – once again we see that values of independence and self-reliance are present in a very small number of citizens. However, the number of “traditionalists” is fewer than in many East European countries.

 

12. IN ENGLISH: What determines trust? Human capital vs. social institutions: evidence from Manila and Moscow  by John Nye, Grigory Andruschak, Maria Yudkevich and others

In developed countries the level of trust within and between different social groups is very high, but in countries with poor quality institutions it is low. But what determines the level of trust – is it individual human capital or institutions? The authors of this paper asked students in the two cities to fill in a written questionnaire. The survey posed questions about who you can trust and to what extent. Institutions in Manila and in Moscow are such that they are not likely to stimulate high levels of confidence. The authors of the report argue that human capital has a more powerful influence than institutions.