The Size of the State Sector of the Economy (Theoretical Approaches, Survey of Literature, Russian Experience)

Abstract

The articles by the experts of the Association of Studies of Public Economics analyze the situation with firms of the state sector of the Russian economy along three directions:

- qualitative analysis of Russian and foreign experience in governing the public sector of the economy;

- institutional and legal analysis of state unitary enterprises (SUEs);

- comparative statistical analysis of performance indicators of public and private firms in Russia.

On the basis of Russian and foreign experience authors study unsuccessful attempts to create effective forms of state entrepreneurship, argue the impossibility to make positive incentives for managers within the system of "bureaucratic entrepreneurship" and the necessity to limit state intervention into economic activity by a small number of public goods which cannot be provided by markets. Authors give a number of examples of various forms of inefficient governance and misuse of public property in modern Russia. Authors study the evolution of the legal form of SUEs which was created in the Soviet-type economy, perspectives of its existence in the modern Russian legislation. They prove the contradictory nature of SUEs and make conclusion about the inevitability of transformation of this sector of the Russian economy. The results of performance indicators comparison of private and public enterprises are contradictory. Federal SUEs show significantly better results than private firms in return on sales, liquidity and financial stability though return on labor and capital (labor productivity and return on assets) is lower in the SUEs. At the same time corporations with a majority block of shares in the hands of the federal government (which are similar to the SUEs in many aspects) are the worst performers among all types of firms with state participation. Authors attempt to explain these contradictions.