Author: Irina BusyginaPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Government-proclaimed desire to promote technological innovations and boost economic growth in Russia implies the need for the state to take an active role in economy and to provide the right stimuli and guarantees for investors. Since the Russian state under the current political regime lacks trust and credibility, and since the actions of the state to promote innovative economic development as well as its likelihood to succeed would depend on its type and characteristics, the economic agenda would demand its democratization. For entrepreneurs and investors, the Russian state in its current form is inefficient, ridden by corruption, lacks accountability and is unpredictable. Most importantly, it cannot credibly commit to respect property rights and sustain the rules. The democratic reform, in ideal, could modernize the Russian state and make it simultaneously strong, limited, accountable, conducive to good governance, and, thus, an effective agent of economic modernization. Yet the same Russian leadership that sees and proclaims the vital importance of economic and technological innovations is reluctant to engage in political modernization, attempting instead to improve the existing model of governance by administrative methods. We explain such reluctance with the heightened political risks from the democratic reform for the stability of the current political regime. In what follows we show that 1) high uncertainty and significant costs of the political reforms accrue before one could expect their positive effects on the economy, and 2) due to the specifics of the Russian political system, the transitional period is expected to last longer and, therefore, be on the whole even riskier and costlier. Thus, we are quite pessimistic about the short and medium term perspectives of the economic innovations program in Russia. On one hand, the current political regime cannot provide “good governance” and credible commitment to form and sustain incentives for domestic and international businesses to invest into technological innovations in Russia. The existing political regime is more suitable for the status-quo economy based on natural monopolies exporting raw materials, metals and energy. On the other hand, anticipation of high costs and risks of political reforms make the choice to pursue them rather unlikely, and even less so during the forthcoming electoral cycle of 2011-12. In any case, political reforms would not have their desirable positive effect on the economy for a number of years.
