What do Russians think about Transition?

Markus Eller

presented at: What do Russians Think about Transition? (09 Nov 2009)

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Markus Eller, Economist, Oesterreichische Nationalbank, Economic Analysis and Research Department, Foreign Research Division

What do Russians Think about Transition?
(based on a joint paper with Irina Denisova and Ekaterina Zhuravskaya, Center for Economic and Financial Research, Moscow, forthcoming in Economics of Transition)

Perceptions of the Russian population about the transition process and the role of the state compared to that of free markets are described relying on data from the 2006 round of the Russian Longitudinal Monitoring Survey (RLMS). We find that about one half of Russian population is disappointed with transition and a large majority is in favour of high state regulation and state provision of goods and services. High demand for government regulation and increased state intervention coexists with a low level of trust in government institutions and recognition of high and rising levels of corruption. The findings are consistent with the theory developed by Aghion et al. In an environment with poor social capital, private business imposes negative externalities on the society and society chooses to demand more state regulation and tolerate corruption in order to reduce these externalities. We also find that individual perceptions of social capital and corruption co-vary with the demand for regulation, as predicted by the theory.

Markus Eller has worked as economist in the foreign research division of the Oesterreichische Nationalbank (OeNB) since March 2008, where he is responsible, inter alia, for scientific coordination of the publication Focus on European Economic Integration, writing comparative analyses for Central, Eastern, and Southeastern Europe on fiscal policy and credit growth, and monitoring macroeconomic developments in Bulgaria. Previously, from 2006-2008, he worked as economist at the Centre for Economic and Financial Research (CEFIR) in Moscow, where he studied households' attitudes towards transition (particularly privatization) in post-communist countries. In 2002 and 2004 he also worked as research assistant at the Research Institute for European Affairs, Vienna University of Economics and Business. Mr. Eller has published in various academic journals: American Political Science Review, Emerging Markets Review, Constitutional Political Economy, Osteuropa-Wirtschaft, Österreichisches Bankarchiv, among others.


Countries covered: Russia