Zaostrovtsev, Andrey

Russian Authoritarianism: "Natural State" against Fair Competition

D. North, J. Wallis and B. Weingast in their well-known book “Violence and Social Orders: Conceptual Framework for Interpreting Recorded Human History” (2009) presented innovative approach to the studies not only of the recorded human history but  modernity as well indentifying the two stages: closed access order (CAO) or natural state and open access order (OAD).  In the centre of the CAO is the rent-seeking behavior: rents creation and following rents division between the major actors. These rents in Russia are the results of the activities of the authoritarian government  as the distributor of monopolies and the dominant holder of the shadow property rights almost in every business. The merger of state power and property rights is one of the most eminent feature of the Russian society. It opens the way to the rent-extraction in the form of "violent entrepreneurship" by the government bureaucrats that results in the business climate rather unfavorable for fair competition. Barriers to entry – that important sign of CAO – are very high in Russia because the state is the main entry barrier builder ("roofs"-keeper). Inside this state Russian corruption may be treated as the cornerstone of the government power, specific social contract that excludes fair competition.

Wednesday 24 October 14:30-16:30 Panels I, Panel 3 Competition and Democracy I (Hall 15)