nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2010‒04‒04
six papers chosen by
Koen Schoors
Ghent University

  1. Market power in the Russian banking industry By Fungacova, Zuzana; Solanko, Laura; Weill, Laurent
  2. Pension Reform Options for Russia and Ukraine: A Critical Analysis of Available Options and Their Expected Outcomes By Marek Gora; Oleksandr Rohozynsky; Oksana Sinyavskaya
  3. The composition and interests of Russia’s business lobbies: A test of Olson’s “encompassing organization” hypothesis By Weill, Laurent; Solanko, Laura
  4. Regional integration and economic convergence in the post-Soviet space: Experience of the decade of growth By Libman, Alexander; Vinokurov, Evgeny
  5. Essays on Asymmetric Federalism By Libman, Alexander
  6. Federalism in Russia By Ekaterina Zhuravskaya

  1. By: Fungacova, Zuzana (BOFIT); Solanko, Laura (BOFIT); Weill, Laurent (BOFIT)
    Abstract: The aim of this paper is to analyze bank competition in Russia by measuring the market power of Russian banks and its determinants over the period 2001-2007 with the Lerner index. Earlier studies on bank competition have focused on developed countries whereas this paper contributes to the analysis of bank competition in emerging markets. We find that bank competition has only slightly improved during the period studied. The mean Lerner index for Russian banks is of the same magnitude as those observed in developed countries, which suggests that the Russian banking industry is not plagued by weak competition. Furthermore, we find no greater market power for state-controlled banks nor less market power for foreign-owned banks. We would consequently qualify the procompetitive role of foreign bank entry and privatization. Finally, our analysis of the determinants of market power enables the identification of several factors that influence competition, including market concentration and risk as well as the nonlinear influence of size.
    Keywords: market power; bank competition; Russia
    JEL: G21 P34
    Date: 2010–03–25
  2. By: Marek Gora; Oleksandr Rohozynsky; Oksana Sinyavskaya
    Abstract: This paper provides the results of analyses of key problems related to pension systems and their reforms in Russia and Ukraine. The pension systems and their reforms in both countries are compared. They are also compared with the general picture observed in the OECD or selected countries belonging to that area. The analysis focuses on long-term trends rather than short-term shocks. The recent economic crisis is not covered since the analysis was mostly completed by 2008. First, we present the general picture which describes the current demographic and economic situations as well as the challenges that are being faced. Then we turn to reform options and actions already taken. We particularly focus on issues that are specific to the countries analyzed.
    Keywords: pension reform, pension system, labour market, transition, industrial restructuring, social security, public finance, Russia, Ukraine
    JEL: H53 H55 H69 J11 J18 J32 J38 P36
    Date: 2010
  3. By: Weill, Laurent (BOFIT); Solanko, Laura (BOFIT)
    Abstract: Why are some lobby groups less benign in their external effects than others? Nearly three decades ago, Mancur Olson (1982) proposed that less-encompassing lobby groups with their constituents collectively representing a narrow range of sectors are more apt to seek the types of subsidies, tariffs, tax loopholes, and competition-limiting regulations that impose costs on the rest of society. To the best of our knowledge, Olson’s oft-cited hypothesis has yet to be actually tested, due perhaps to the absence of adequate data on general policy preferences of various types of lobbies. Thus, we examine a pair of surveys from 2003 and 2004 which were targeted at managers of business associations (lobby groups) and their enterprise constituents to directly test Olson’s hypothesis. Managers from a diverse array of Russian industrial firms and business associations were asked similar questions regarding their attitudes to policies that explicitly benefit well-defined sectoral or regional interests and, implicitly, impose external costs. The pattern of responses is striking. Managers of less-encompassing associations and the constituent firms of such groups are much more apt to see such policies in a favorable light. In contrast, more-encompassing associations and their member display greater skepticism toward narrowly targeted government interventions. Our results strongly support Olson’s hypothesis.
    Keywords: business associations; encompassing interests; Russia; Olson
    JEL: D02 D70 L31
    Date: 2010–03–25
  4. By: Libman, Alexander; Vinokurov, Evgeny
    Abstract: This paper examines the dynamics of regional integration and economic convergence in the post-Soviet world during the period 1999-2008. This is the period, when FSU countries experienced rapid economic growth, following the “Big Bang” of the disintegration of the Former Soviet Union (FSU) and the deep economic recession of the 1990s. It starts by discussing a set of indicators reflecting various aspects of interaction of post-Soviet countries (trade, labor migration, integration in key functional markets and economic convergence in different areas) and examines the dynamics of these indicators for the whole region and sub-groups of countries, as well as potential causes and conclusions to be drawn. In addition, it looks at the clusters of regional integration and economic convergence using the hierarchical cluster analysis and attempts to identify the reasons for their formation. We find that during the period studied the trade integration experienced a negative trend, but at the same time we observe an unprecedented expansion of labor migration – thus suggesting that integration of factor flows can outperform integration of markets for goods and services. Finally, clustering processes of the post-Soviet states for the economic convergence and for the economic integration seems to be unaffected by each other.
    Keywords: regional integration; economic convergence; post-Soviet space; integration clubs
    JEL: F15 P27
    Date: 2010
  5. By: Libman, Alexander
    Abstract: The growing research on fiscal and political federalism in economics (as well as rational choice political science) basically shares two main assumptions regarding federal institutions: it takes democratic and symmetric federations as the reference point. Democracy means that the decision making is based on elections and/or referenda, which effectively constraint the actions of politicians. Symmetry means that the ”degree of devolution” for all regions is identical. In particular, if both federal and regional budgets are funded by a common split tax, the de-jure retention rate is identical for all states. It goes without saying that there is a multitude of models looking at economic asymmetry between regions: most federations include states or regions with significantly different economic potential, population and territory, obviously influencing both their comparative economic performance and their behavior in the federal bargaining. However, the economic asymmetry does not (necessarily) provide an identity mapping into the asymmetric devolution in terms of formal institutions and informal policy making (what I refer to as ”asymmetric federation” in this paper): this issue requires careful analysis.
    Keywords: Federalism; decentralization; Russia.
    JEL: H77
    Date: 2009–10
  6. By: Ekaterina Zhuravskaya (New Economic School, CEFIR, and CEPR)
    Date: 2010–03

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