• L. Polishchuk — Institutional Outsourcing
• R. Kapeliushnikov — Behavioral Economics and New Paternalism. Part I

• E. Belyanova, S. Nikolaenko — Impact of Corruption on Business Development: Empirical Estimates

• E. Fedorova, A. Lysenkova — Assessing the Impact of the Instruments of Monetary Policy on Achieving Objectives of the Central Bank of RF
• E. Deryugina, A. Ponomarenko — Money-based Inflation Risk Indicator: A Regime Switching Model

• S. Kadochnikov, A. Fedyunina — The Impact of Related Variety in Export on Economic Development of Russian Regions

• O. Antipina — What Is the Future of the Market Economy? (On the Book by Justin Yifu Lin "The Quest for Prosperity: How Developing Economies Can Take Off")

Abstracts

The paper looks into emergence of external imbalances and economy’s adjustment to them. We find that Russian economy adjusts mainly via increase or decrease of domestic demand (resulting in substantial risks and losses of production), while capacity of adjustment via exchange rate channel is very limited. Another conclusion is that long-term growth rate compatible with external sustainability amounts to just 2,2%. Any attempts to boost growth above this level, not supported with profound structural reforms, would entail regular painful crises, reverting economy to the two-percentage growth trajectory.

JEL classification: F32, F43, G01.
Keywords: external imbalances, balance of payment sustainability, current account adjustment, financial crisis.

Since the inception of market reforms until the present day Russian institutions have been shaped primarily by economic and political elites, with minimal involvement of the rest of the society in this process. Outcomes of such "institutional outsourcing" for the society depend on the affinity between elites’ preferences and societal needs. Low quality of Russian institutions is explained in the paper by a substantial conflict of interests between the society and unaccountable elites. Prospects of Russian modernization are thus contingent on the accumulation of civic culture and more effective representation of the society in the process of institutional change.

JEL classification: D72, D78, O17.
Keywords: elites, institutions, collective action problem, open and limited access orders.

The paper provides a critical appraisal of the normative program of behavioral economics known as new paternalism. Part I of the paper explores its theoretical foundations, describes major behavioral anomalies associated with bounded rationality of economic agents, discusses normative principles and political implications of this new approach.

JEL classification: A13, D03, D60, D63.
Keywords: behavioral economics, welfare economics, new paternalism, normative analysis.

The paper considers the relationship of corruption and domestic business environment. The authors propose a method of quantitative estimation of the impact of corruption on the business climate through the use of international ratings. The quantitative estimations obtained allow to construct an alternative rating of business environment, free of the influence of corruption, and estimate, with its help, the comparative advantages of Russia as of late 2012. In addition the paper determines the limits of possible improvement of the business climate in Russia on the assumption that the effectiveness of anti-corruption policy would be low.

JEL classification: D73, O57, P37.
Keywords: corruption, business environment, international comparisons.

In this paper, using an econometric model (the model with Markov switchings), monetary policy of the Russian Federation in 2001—2011 is studied, based on the Taylor rule. CBR’s policy priorities in relation to inflation and the exchange rate in the given period are identified. Monetary tools are revealed, which support the mode selected by the CBR.

JEL classification: E52, E58.
Keywords: monetary policy, Taylor rule, Markov model, inflation, exchange rate.

We examine the relationship between probability of large fluctuations of inflation rate and monetary developments. With this purpose we identify the periods of high inflation regime for the cross-section of 15 transition economies. The obtained results are used to estimate the panel probit models that capture the relationship between probability of transition to a high inflation regime and money growth. We calculate the conditional probability of transition to a high inflation regime that may be regarded as a money-based inflation risk indicator for Russia.

JEL classification: C53, E31.
Keywords: monetary aggregates, inflation, transition economies.

In this paper we study the linkage between export structure and economic development in Russian regions. We conjecture that not only export variety per se, but export variety of related products, located at a small distance in the product space, significantly contributes to economic growth. Empirical analysis highlights the importance of the product space density around products with comparative advantage for economic growth in Russian regions during 2003—2008. We conclude that the presence of industry variety in a region facilitates economic development.

JEL classification: F14, O14, O33, O40.
Keywords: export diversification, product variety, economic growth.

According to the opinion of Chinese economist J. Y. Lin, industrial structure of economy is endogenously determined by factors of production. Its effective operation is possible only under the influence of market forces. The main role of the government is to target the strategic support for specific industries with comparative advantages, as well as to improve the infrastructure.

JEL classification: F43, H11, O11, O29, P11, P17.
Keywords: industrial structure, government policy, comparative advantages.