Alexei Izyumov

Human Costs of Post-communist Transition: Public Policies and Private Response

Abstract The transition to capitalism in former communist countries of Eastern Europe and the USSR was achieved at a very high human cost, leading to unprecedented increases in poverty, inequality, and other forms of deprivation. This paper surveys the literature and data on human costs of post-communist transition and discusses differences in responses to poverty among countries of the region. It argues that human costs of transition to the market were strongly influenced by policy choices made by the governments and were least severe in countries of central eastern Europe, where public response dominated the anti-poverty efforts. In most of the countries of the former USSR and south-eastern Europe, state-run poverty abatement programs were largely inadequate, putting the brunt of the struggle with poverty onto the shoulders of families and individuals.

Models of Capitalism and Income Distribution in Transition Economies: A Comparative Perspective

During the 1990s, all of the European transition economies (TE) experienced a major recession and suffered from the explosion of income inequality. However, distribution of income between labor and capital differed greatly from one group of post-communist countries to another. The paper discusses and analyzes linkages between models of capitalism that emerged in former communist countries in the 1990s and the outcome of capitalist transition for labor in terms of income distribution and inequality. It is based on the estimates of the Marxian rate of exploitation and other indicators of labor income performance during the reform period.

The Russian Defence Industry Confronts the Market: Findings of a Longitudinal Study

Abstract Since the start of market reforms, enterprises of the Russian military–industrial complex have lived through a massive crisis and a spectacular revival. Using original data from a longitudinal survey covering the period of 1995–2006, this article analyses the impact of transformation in the defence industry on labour and labour–management relations. We find that by the mid-2000s defence enterprises were largely able to stop job losses, eliminate wage arrears and restore wages to the level prevailing in the civilian economy. The study confirms that compared to other sectors of the Russian economy, defence enterprises continue to carry a strong legacy of the Soviet system. The dominant role of state ownership and government orders, along with the relative geographical isolation of defence enterprises and obvious factors of secrecy and security, made labour at these enterprises less willing to challenge management or owners by strikes and open protests. On the other hand, workers of defence enterprises can count on a more paternalistic attitude from managers and relatively more generous welfare benefits.

Defence Industry Transformation in Russia: Evidence from a Longitudinal Survey

The article is devoted to the new phenomena in the market transformation of the Russian defence-industrial complex. Based on the data generated by the repeated survey of the CEOs (general directors) of defence enterprises in 1995‐99, it examines economic performance of enterprises, their conflicts with the government and efforts at internal restructuring brought about by reductions of Russias defence spending, mass privatisation and opening up of the domestic market. We found that despite the dramatic reduction in defence orders, inconsistent government policies and extremely unfavourable macroeconomic environment, the Russian defence industry has made significant progress in its adjustment to the market. Even before the devaluation of the ruble in the autumn of 1998 economic performance of defence enterprises had been gradually improving; it entered a virtual boom since then. Contrary to widely held views, the painful experience of the 1990s has not made the top managers of the defence industry more hostile to reforms: at the end of the decade they were generally more supportive of the market than in 1995.

Recent trends in factor income shares: a global perspective

Purpose–The purpose of this paper is to provide estimates of factor income shares for 79 developed, developing and transition economies representing close to 90 percent of the world output and to test for income share convergence. Design/methodology/approach–The paper uses data from the United Nations National Accounts and World Bank World Development Indicator databases and the factor-income-share estimation methodology developed in Bernanke and Gurkaynak (2001) and Gollin (2002). Findings–The authors estimate indicated that the average levels of capital income (profit) shares in developing and transition countries are 1.4-1.5 times higher than in developed economies. During the period studied, profit shares in all groups of countries trended upwards. As a result, the “global” profit share increased thus extending the “labor share squeeze” of the 1980s and 1990s. Practical implications–The finding of persistent and significant differences in factor shares in countries of different development levels calls into question the assumption of uniform factor shares’ often made in studies of economic growth. The detection of a broadly based upward trend in profit shares has implications for studies of income distribution and inequality. Originality/value–The papers contribution is in providing updated estimates of factor income shares for the broad sample of countries, including in particular transition economies, not covered in previous studies; confirming the positive link between profit share and countrys income level; countering claims of factor income convergence and establishing the upward trend in “global” profit share.

Privatisation of the Russian Defence Industry: Ownership and Control Issues

This article analyses the outcome of privatisation in the Russian defence industry in the second part of the 1990s. It is based on the results of the longitudinal survey of defence enterprises conducted over the period 1995‐99 in the main defence production regions of Russia: Moscow, St Petersburg, Central European region, Western Siberia, Volga region, the Urals and the Far East. Using the survey data, we investigate the distribution of ownership in defence enterprises and examine the non-linear relationship between ownership and control inside these enterprises. We also test the hypothesis of the growing criminal influence in defence enterprises and outline a possible future scenario for privatisation in the defence industry.

From the Plan to the Market and Back—The Organisational Transformation of the Russian Defence Industry

Abstract The article examines the organisational transformation of the Russian defence industry during the period of privatisation and radical market reforms. The study is based on the results of an original large-scale longitudinal survey of the directors (CEOs) of the industry. We find that over a decade of transition, 1996–2006, Russian defence industry managers were able largely to preserve the production potential of their enterprises and make them capable of operating under market conditions. Coupled with the restoration of government orders and the 2020 rearmament programme, these newly acquired market skills have contributed to the impressive revival of the Russian defence industry in the Putin era.

Rent‐Based Exploitation: Top, Bottom and Horizontal

In this essay we argue that current emphasis on economic rents captured by the wealthy produces an incomplete representation of exploitative incomes and propose to expand the analysis by including in it economic rents accruing to segments of the poor and the working population.

The investment/labor ratio in the Russian armed forces: Lessons from the us?

The main goal of this paper is to evaluate recent trends in Russian military reorganization. In this effort, we enlist the experience of the US militarys transition from conscription to an all‐volunteer force (AVF). We show how the US 1970s transition to market‐based acquisition of labor contributed to a rising military investment‐to‐labor (?K/L) ratio. In Russia since the start of market reforms, this ratio has been falling. We explain this divergence by noting the increase in the relative price of Russian military capital resulting from the switch to “quasi‐market” acquisition of capital while a draft remains in use for obtaining labor. Russias transition to an AVF and the latest efforts to “recapitalize” its military are analyzed and evaluated.

Conversion in the Soviet Union — and Possibilities for Cooperation in the Baltic Region

Taking into account the paramount role of conversion and the limited ability of the Soviet Union to cope with its challenges, much more cooperation is needed in this area in the European and especially the North European context. The purpose of this paper is to present a critical account of the experience of the USSR in the field of conversion, reflecting both its achievements and its failures, and to put forward some ideas for cooperation between the Soviet Union and other coun-