nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2019‒09‒16
fourteen papers chosen by

  1. Crouching Bear and Hidden Dragon: The Limitations in the Sino-Russian Alliance By Maria Papageorgiou; Luis Fernando Correa da Costa; Mohammad Eslami
  2. Gender Issues in Russian Democratization: The Myth or the Reality? By Marina Pilkina
  3. Monthly Report No. 2/2019 By Andrei V. Belyi; Peter Havlik; Artem Kochnev; Ilya B. Voskoboynikov
  4. Technology Adoption in Agrarian Societies: the Effect of Volga Germans in Imperial Russia By Timur Natkhov; Natalia Vasilenok
  5. Should one follow movements in the oil price or in money supply? Forecasting quarterly GDP growth in Russia with higher†frequency indicators By Heiner Mikosch; Laura Solanko
  7. The Incompatibility of the Sharia Law and the Cairo Declaration on Human Rights in Islam with the European Convention on Human Rights By Titus Corlățean
  8. Under Pressure? Performance Evaluation of Police Officers as an Incentive to Cheat: Evidence from Drug Crimes in Russia By Ekaterina Travova
  9. К вопросу о межрегиональном перераспределении населения в Советской России By Кумо, Кадзухиро
  10. The Formation of Hidden Negative Capital in Banking: A Product Mismatch Hypothesis By Alexander Kostrov; Mikhail Mamonov
  11. Applying green public procurement to food supply and catering services:Case study in Latvia By Inese Pel?a; Nora ?ibilda - Kinna; Jana Simanovska
  12. Factors Influencing Student Satisfaction in Higher Education. The Case of a Georgian State University By Nino Tandilashvili
  13. University-to-School Environmental Projects for Sustainable Development: A Case of Ural Federal University By Marina Volkova; Jol Stoffers; Dmitry Kochetkov
  14. Macroeconomic Dynamics at the Cowles Commission from the 1930s to the 1950s By Robert W. Dimand; Harald Hagemann

  1. By: Maria Papageorgiou (University of Minho, Portugal); Luis Fernando Correa da Costa (University of Minho, Portugal); Mohammad Eslami (University of Minho, Portugal)
    Abstract: In the post-cold war era there has been a remarkable renewal and strengthening of Sino-Russian relations, especially from 2000 onwards. Moscow and Beijing started renewing and enhancing their ties in security, trade, as well as diplomatic issues more vigorously. Τhe close cooperation between the two countries is evident however the partnership hasn’t advanced to an anti-hegemonic opposition bloc despite the opportunities that arise. Russia and China are two rising powers with a great geopolitical weight in the international system and their partnership constitutes a constant topic of analysis. Sino-Russian co-operation takes place on many levels from energy supplies, joint military exercises, trade agreements, arms sales and the establishment of new multilateral institutions (such as the Sanghai organization, BRICS New Development Bank and the Asian Infrastructure Investment Bank, AIIB) to a broad consensus on issues in international relations. However, the two powers haven’t formed an actual alliance that could fundamentally alter the distribution of power in the international system.
    Keywords: China, Russia, strategic partnership, arms sales, energy trade, cooperation
    Date: 2019–04
  2. By: Marina Pilkina (Master student National Research University “Higher School of Economics,†Moscow,)
    Abstract: The aim is to determine whether the descriptive political representation of women is acceptable and achievable for the Russian political reality. Understanding the quality of democracy assumes going beyond mere political participation. It requires the actual representation of traditionally marginalized groups - women. Gender mainstreaming and the involvement of both sexes in political sphere is a sine qua non for any democratic structure. In fact, it may seem that women are included in the democracy, but in practice they are often excluded. Such situation is observed in Russia. The formal female representation in Russian politics exists only to eliminate direct discrimination against women. This nature of women's participation is confirmed by the fact that “women are involved in Russian politics to meet the needs of the regime.†The low level of female representation is also linked to the lack of prominent political parties supporting women's rights. Formal female representation does not imply equal gender representation. Balanced representation may require a descriptive political representation – a visible match between the electorate and representatives. If women are half of the population, they should also compose approximately half of the legislative and executive bodies. Given the nature of the gender situation in the Russian political arena, it is not yet possible to represent marginalized groups in a descriptive manner, even though women are about 54% of the Russian population. The inclusion of women's issues in the agenda and mainstreaming of gender inequality is likely to make the descriptive female representation in Russia achievable.
    Keywords: women, Russia, democratization, formal and descriptive representation, gender
    Date: 2019–04
  3. By: Andrei V. Belyi; Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Artem Kochnev; Ilya B. Voskoboynikov
    Abstract: Chart of the month The Russian economy and oil prices by Peter Havlik Opinion corner Russia’s new social contract in light of the oil taxation reforms by Andrei V. Belyi The fiscal rule and the foreign exchange market in Russia Stepping in the same river twice? by Artem Kochnev Last month the Central Bank of Russia announced its return to the foreign exchange market, according to the fiscal rule implemented in 2017. This note finds that the previous round of the currency interventions by the Bank of Russia was effective in stabilising exchange rate movements by counterbalancing the effects of the oil price changes on the Russian currency. Global slowdown and the Russian economy by Ilya B. Voskoboynikov The article reviews long-run sources of Russian economic growth and demonstrates that the stagnation of the Russian economy in the past decade can be considered in the context of the global productivity slowdown. Conventional industry growth accounting shows that in contrast to the transformational recession before 1998, the recent stagnation of 2008-2014 is primarily the outcome of a slowdown in total factor productivity (TFP) growth and a deterioration in the allocation of labour, rather than bottlenecks in capital inputs. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: oil price, balance of payments, oil taxation, social contract, ‘energy superpower’ concept, fiscal rule, foreign exchange market, growth accounting, total factor productivity, structural change, capital intensity
    Date: 2019–02
  4. By: Timur Natkhov (National Research University Higher School of Economics); Natalia Vasilenok (National Research University Higher School of Economics)
    Abstract: This paper examines technology adoption in pre-industrial societies. We use the case of a technologically advanced and spatially concentrated German minority in Saratov province of the Russian Empire to study adoption patterns among Russian peasants in late 19th–early 20th century. We find that distance from German colonies predicts the prevalence of heavy ploughs, fanning mills and wheat sowing among Russians, who traditionally sowed rye and plowed with wooden ard (sokha). We show a significant rise in labor productivity in agriculture resulting from the adoption of heavy ploughs. However, we find no evidence for the adoption of non-codified knowledge like blacksmithing, carpentry, textile manufacture, tanning and other artisan skills. Hence, the adoption of advanced tools does not necessary induce the diffusion of skills required to produce those tools. This may well be the key to the problem of slow technological convergence
    Keywords: technology adoption, economic development, agriculture, Russian Empire
    JEL: N33 N53 I15 O15
    Date: 2019
  5. By: Heiner Mikosch (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Laura Solanko (BOFIT, Bank of Finland, Snellmaninaukio)
    Abstract: GDP forecasters face tough choices over which leading indicators to follow and which forecasting models to use. To help resolve these issues, we examine a range of monthly indicators to forecast quarterly GDP growth in a major emerging economy, Russia. Numerous useful indicators are identified and forecast pooling of three model classes (bridge models, MIDAS models and unrestricted mixed-frequency models) are shown to outperform simple benchmark models. We further separately examine forecast accuracy of each of the three model classes. Our results show that differences in performance of model classes are generally small, but for the period covering the Great Recession unrestricted mixed-frequency models and MIDAS models clearly outperform bridge models. Notably, the sets of top-performing indicators differ for our two subsample observation periods (2008Q1–2011Q4 and 2012Q1–2016Q4). The best indicators in the first period are traditional real-sector variables, while those in the second period consist largely of monetary, banking sector and financial market variables. This finding supports the notion that highly volatile periods of recession and subsequent recovery are driven by forces other than those that prevail in more normal times. The results further suggest that the driving forces of the Russian economy have changed since the global financial crisis.
    Keywords: Keywords: Forecasting, mixed frequency data, Russia, GDP growth
    JEL: C53 E27
    Date: 2018–01
  6. By: Charu Bhurat (SVKM?s NMIMS Anil Surendra Modi School of Commerce)
    Abstract: Financial inclusion means providing access to financial services at affordable cost to all individuals and businesses especially to the vulnerable and weaker income groups. This paper aims to examine the concept of financial inclusion and its relevance with respect to the world?s emerging economies Brazil, Russian Federation, India, China and South Africa (BRICS). The BRICS nations have been the growth drivers of the world economy and higher financial inclusion means a better level of socio-economic development. Various financial inclusion indicators from The Global Partnership for Financial Inclusion (GPFI) have been used to compare data of these countries. With the help of this paper, an attempt has been made to analyse the state of financial inclusion and digital financial services amongst BRICS nations. Also, the BRICS nations have been compared in terms of income as well as gender disparity for various financial inclusion indicators.
    Keywords: BRICS, Financial inclusion, digital transactions, banking
    JEL: E02 E44 F33
    Date: 2019–06
  7. By: Titus Corlățean (“Dimitrie Cantemir†Christian University, Bucharest)
    Abstract: The Resolution 2253 (2019) of the Parliamentary Assembly of the Council of Europe deals with the question if the Sharia law (“Islamic law†) and the 1990 Cairo Declaration on Human Rights in Islam are compatible with the European Convention on Human Rights. This question was raised within the context of the endorsement of the Cairo Declaration by three member states of the Council of Europe, states that also ratified the European Convention upon their accession to the Council of Europe (Albania, Azerbaijan, Turkey). The same question is relevant also for Russia and Bosnia and Herzegovina, but also for Jordan, Kyrgyzstan, Morocco and Palestine, whose parliaments enjoy partner for democracy status with the Parliamentary Assembly of the Council of Europe. The European Court of Human Rights (the Grand Chamber) had already in 2003 the opportunity to give an answer to the above mentioned question: it “concurs in the Chamber’s view that Sharia is incompatible with the fundamental principles of democracy, as set forth in the Convention.†Based on its own assessment and a comprehensive report adopted by the Committee on Legal Affairs and Human Rights, the Strasbourg Parliamentary Assembly concludes on the topic that “the various Islamic declarations on human rights..., while being more religious than legal, fail to reconcile Islam with universal human rights, especially insofar as they maintain the Sharia law as their unique source of reference. That includes the 1990 Cairo Declaration on Human Rights in Islam…†This study focuses on the analysis of the Assembly’s report and resolution and also on country specific recommendations.
    Keywords: European Convention, Human Rights, Sharia, Cairo Declaration, incompatibility
    Date: 2019–04
  8. By: Ekaterina Travova
    Abstract: This paper provides an empirical analysis of possible manipulations of amounts of seized drugs, based on a unique dataset that contains full information on drug crimes in Russia reported during 2013-2014. First, using a standard bunching estimator, I investigate the incentives for police officers to manipulate and find that the motivation most likely arises from the officers’ performance evaluation system. Second, applying a novel bunching technique, I determine that police officers are more likely to manipulate the drug amounts seized from repeat offenders. The overall effect of manipulation is an additional year of incarceration, and this is not dependent on a guilty plea.
    Keywords: drug crimes; police discretion; performance evaluation; incentives;
    JEL: H11 H76 K14 K42
    Date: 2019–04
  9. By: Кумо, Кадзухиро
    Abstract: Дискуссия о межрегиональной миграции в СССР утверждала, что государственное управление перераспределением населения на начальном этапе советского периода было эффективным, но к его концу действенность стимулирующих механизмов, включая государственные инвестиции, ослабла. Это, несомненно, могло быть таковым в принципе, однако следует признать, что такое утверждение не согласуется с наблюдаемыми явлениями. В действительности, приток населения постоянно наблюдался в регионах Дальнего Востока и Крайнего Севера даже в самом конце советского периода, что свидетельствует, вероятно, об эффективном государственном управлении в отношении географического перераспределения населения. Данная работа подтверждает действенность государственного управления миграцией населения в позднесоветскую эпоху, используя новые ставшие доступными данные. Мы предполагаем, что применявшиеся в прошлых исследованиях аналитические единицы (экономические районы или города), могут создавать проблемы, не позволяя точный учет эффекта различных факторов. Это говорит о необходимости дальнейшей проверки результатов, полученных в советское время.
    Keywords: Россия, межрегиональная миграция, Советский Союз, матрица отправление-назначение
    Date: 2019–08
  10. By: Alexander Kostrov; Mikhail Mamonov
    Abstract: This paper investigates the phenomenon of hidden negative capital (HNC) associated with bank failures and introduces a product mismatch hypothesis to explain the formation of HNC. Given that troubled banks tend to hide negative capital in financial statements from regulators to keep their licenses, we attempt to capture this gambling behavior by evaluating product mismatches reflecting disproportions between the allocation of bank assets and the sources of funding. We manually collect unique data on HNC and test our hypothesis using U.S. and Russian banking statistics for the 2004–2017 period (external validity argument). To manage the sample selection concerns, we apply the Heckman selection approach. Our results clearly indicate that product mismatch matters and works similarly in both U.S. and Russian banking systems. Specifically, an increase in mismatch has two effects: it leads to a higher probability that a bank’s capital is negative and raises the conditional size of the bank’s HNC. Further, we demonstrate that the mismatch effect is heterogeneous with respect to bank size being at least partially consistent with the informational asymmetry view. Our results may facilitate improvements in the prudential regulation of banking activities in other countries that share similar features with either the U.S. or Russian banking systems.
    Keywords: bank failure; hidden negative capital; product mismatch; misreporting; Heckman selection model;
    JEL: G21 G33 C34
    Date: 2019–03
  11. By: Inese Pel?a (University of Latvia); Nora ?ibilda - Kinna (University of Latvia); Jana Simanovska (Vidzeme University of Applied Sciences)
    Abstract: Green public procurement (GPP) is a process whereby public and municipal authorities seek to procure goods and services with the lowest environmental impact throughout their entire life cycle, taking into account also the life cycle costs compared to products with the same primary function. GPP can reduce not only the environmental impact, but also promote social benefits and budget savings. The requirements for GPP and the procedure for its application in Latvia are determined by governmental regulations. That requires mandatory application of the GPP to seven groups of goods and services, among them food and catering services. In 2017, the share of total procurements that self reported application of GPP was 11.8% in financial expression, but in 2018 - 18.4%. In 2017, according to self reports 54% of all food product tenders and 79% catering services were marked as GPP tenders. In 2018 already 90% of all food product tenders and 99% catering services are marked as GPP tenders. However, to what extent we can rely on self reports? To evaluate application of GPP requirements for food products and catering services, we screened in total 106 tenders (73 tenders for the supply of food products and 33 for catering services), which were published from July 1, 2017 till July 1, 2018, comparing the tender documents with the governmental regulations. We found that the terms in the Technical Specifications and other tender documents were often unclear. The most common included criterion was requirement that the food products supplied may not contain or be produced from genetically modified organisms (97%). While the second most frequently used criterion is so called higher quality food (28%) e.g. certified as organic, national quality schemes or from integrated agriculture. However, only 4% of the tender documents gave higher priority exclusively for organic food compared to local quality schemes or integrated agriculture. Considering that organic foods are usually higher priced, it can be assumed that only in 4% of cases procurements result in delivering organic food. 18% of the tenders require foods from the national food quality scheme, and 16% of the tenders require products from either organic farming or integrated agriculture. In order to promote organic food, purchasers should more clearly require organic products.
    Keywords: Green public procurement, food and catering services, case study Latvia
    JEL: H70 Q50
    Date: 2019–06
  12. By: Nino Tandilashvili (Ilia State University, Tbilisi, Georgia)
    Abstract: With the increasing importance, higher education is considered as a major asset for any nation’s socio-economic and technological development. The quality of education offered by the higher education institutions directly impacts country’s performance. That is why, number of scientific researches and public reports and debates agrees on the importance of the quality management in higher education. There is also an important debate on a link between the service quality and students’ satisfaction. On the one hand, there is a logical dependence of the degree of satisfaction to the perceived quality. On the other hand, number of studies have also identified a link between students’ satisfaction and their loyalty. This study looks at the determinants of student satisfaction in Georgian Higher Education Institutions. With the objective to detect the main components of service quality influencing students’ satisfaction, the article uses HEdPERF as a measuring instrument of higher education service quality. Data is collected from 793 students of one of the largest universities of the country. An exploratory factor analysis six factors for the further examination. After scale development, a multiple regression analysis is used to test the research hypothesis. The results of the study show that the administrative factors are the most sensitive and have a positive influence on the students’ satisfaction. Also, there is a positive relation between academic programs and student’s satisfaction. The disproportionate attitude is observed between the importance of academic factors and satisfaction.
    Keywords: service quality, customer perception, student satisfaction, HEdPERF, higher education
    Date: 2019–07
  13. By: Marina Volkova; Jol Stoffers; Dmitry Kochetkov
    Abstract: Sustainable development is a worldwide recognized social and political goal, discussed in both academic and political discourse and with much research on the topic related to sustainable development in higher education. Since mental models are formed more effectively at school age, we propose a new way of thinking that will help achieve this goal. This paper was written in the context of Russia, where the topic of sustainable development in education is poorly developed. The authors used the classical methodology of the case analysis. The analysis and interpretation of the results were conducted in the framework of the institutional theory. Presented is the case of Ural Federal University, which has been working for several years on the creation of a device for the purification of industrial sewer water in the framework of an initiative student group. Schoolchildren recently joined the program, and such projects have been called university-to-school projects. Successful solutions of inventive tasks contribute to the formation of mental models. This case has been analyzed in terms of institutionalism, and the authors argue for the primacy of mental institutions over normative ones during sustainable society construction. This case study is the first to analyze a partnership between a Federal University and local schools regarding sustainable education and proposes a new way of thinking.
    Date: 2019–09
  14. By: Robert W. Dimand (Department of Economics, Brock University); Harald Hagemann (University of Hohenheim)
    Abstract: Jacob Marschak shaped the emergence of monetary theory and portfolio choice at the Cowles Commission (which he directed from 1943 to 1948, but with which he was involved already from 1937) at the University of Chicago, where he was the doctoral teacher of Leonid Hurwicz, Harry Markowitz and Don Patinkin, and then from 1955 at the Cowles Foundation at Yale University, where he was a senior colleague of James Tobin until moving to UCLA in 1960. Marschak’s later attempts to clarify the concept of liquidity and to emphasize the role of new information for economic behavior date back as far as to his early experiences with hyperinflationary processes in the Northern Caucasus during the Russian Revolution. Marschak came to monetary theory with his 1922 Heidelberg doctoral dissertation on the quantity theory equation of exchange (published in 1924 as “Die Verkehrsgleichung”), and embedded monetary theory in a wider theory of asset market equilibrium in studies of “Money and the Theory of Assets” (1938), “Assets, Prices, and Monetary Theory” (with Helen Makower, 1938), “Role of Liquidity under Complete and Incomplete Information” (1949), “The Rationale of the Demand for Money and of ‘Money Illusion’” (1950), and “Monnaie et liquidité dans les modèles macroéconomiques et microéconomiques” (1955), as well as in Income, Employment and the Price Level (lectures Marschak gave at Chicago, edited by Fand and Markowitz, 1951). We examine Marschak’s analysis of money within a broader theory of asset market equilibrium and explore the relation of his work to the monetary and portfolio theories of his doctoral students Markowitz and Patinkin and his colleague Tobin and to the revival of the quantity theory of money by Milton Friedman, a University of Chicago colleague unsympathetic to the methodology of the Cowles Commission.
    Keywords: Jacob Marschak, Money in a theory of assets, Cowles Commission, Harry Markowitz, James Tobin
    JEL: B22 B31
    Date: 2019–09

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