Wednesday, March 10, 2010

File It Away

We read Economics of Transition so you don't have to:

What Do Russians Think About Transition?

[INSERT random Russian obscure professors name generator here]

Economics of Transition, Vol. 18, Issue 2, pp. 249-280, April 2010


We use data from the 2006 round of the Russian Longitudinal Monitoring Survey to describe perceptions of the Russian population about the transition process and the role of the state compared with that of free markets.

We find that about one-half of the Russian population is disappointed with transition and a large majority is in favour of high state regulation and state provision of goods and services. High demand for government regulation and increased state intervention coexists with a low level of trust in government institutions and recognition of high and rising levels of corruption.

The findings are consistent with the theory developed by Aghion et al. (2009). In an environment with poor social capital, private business imposes negative externalities on the society and society chooses to demand more state regulation and tolerate corruption to reduce these externalities. We also find that individual perceptions of social capital and corruption co-vary with the demand for regulation, as predicted by the theory.

Keep this study for your children; tell them to read it when they are adults and they'll understand their plight a little better.