The great transition: The dynamics of market transitions and the case of Russia, 1991-1995

Theory and Society

Volumn 28, Issue 3, 1999, Pages 383-424

  Hass, Jeffrey K ^a  

^a WASHINGTON AND LEE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0033411595     PISSN: 03042421     EISSN: None     Source Type: Journal    
DOI: 10.1023/A:1006919018233     Document Type: Review

References (210)

1. Herbert Bowles and Samuel Gintis, Democracy and Capitalism (New York: Basic Books, 1986), 89.
2. While economic change and transitions need not lead to capitalism, the specific transition examined here involves creating a "capitalist market." Thus, just what is capitalism? Do we understand capitalism in institutional-structural terms (e.g., as private property controlled by non-state actors) or in institutional-cultural terms (e.g., as a rationalized economic system with no cultural barriers to exchange)? While I do not attempt to provide a definitive answer here, I accept that capitalism has both a structural and a cultural component. Different variants of capitalism, e.g., state-centered (Japan or South Korea) or enterprise-centered (United States), appear to share certain cultural or strategic characteristics that Weber noted (e.g., rationalized practices, rationalized study of surroundings in order to control them, and formalized roles and positions).
3. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
4. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
5. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
6. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
7. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
8. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
9. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
10. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
11. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
12. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 4 (1991): 59-76, and "What is Shock Therapy? What Did it Do in Poland and Russia?" Post-Soviet Affairs 9/2 (1993): 111-140; Joseph Brada, "The Transformation from Communism to Capitalism: How Far? How Fast?" Post-Soviet Affairs 2 (1993): 87-110; Ivan Szelenyi and Szonja Szelenyi, "Circulation or Reproduction of Elites During the Postcommunist Transformation of Eastern Europe," Theory and Society 24/5 (1995): 615-638; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, "The Theory of Post-Communist Managerialism," New Left Review 222 (March/April 1997), 60-92; John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25/1 (1996): 45-84; Juliet Johnson, "Fistful of Rubles," Ph.D. dissertation, Princeton University, 1997; the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997); David Stark, "Path Dependence and Privatization Strategies in East Central Europe," East European Politics and Societies 6 (1992): 17-51; Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism (Ithaca: Cornell University Press, 1997).
13. This is not the place for a full (or even partial) review of the work on market transitions. For an overview of the logic and conclusions of much of this and related work, see the following: Miguel Centeno, "Between Rocky Markets and Hard Democracies," Annual Review of Sociology 20 (1994): 125-147; Andrew Walder, "Markets and Inequality in Transitional Economics: Toward Testable Theories," American Journal of Sociology 101/1 (1996): 1060-1073; Alice H. Amsden, Jacek Kochanowicz, and Lance Taylor, The Market Meets its Match: Restructuring the Economies of Eastern Europe (Cambridge: Harvard University Press, 1994).
14. This is not the place for a full (or even partial) review of the work on market transitions. For an overview of the logic and conclusions of much of this and related work, see the following: Miguel Centeno, "Between Rocky Markets and Hard Democracies," Annual Review of Sociology 20 (1994): 125-147; Andrew Walder, "Markets and Inequality in Transitional Economics: Toward Testable Theories," American Journal of Sociology 101/1 (1996): 1060-1073; Alice H. Amsden, Jacek Kochanowicz, and Lance Taylor, The Market Meets its Match: Restructuring the Economies of Eastern Europe (Cambridge: Harvard University Press, 1994).
15. This is not the place for a full (or even partial) review of the work on market transitions. For an overview of the logic and conclusions of much of this and related work, see the following: Miguel Centeno, "Between Rocky Markets and Hard Democracies," Annual Review of Sociology 20 (1994): 125-147; Andrew Walder, "Markets and Inequality in Transitional Economics: Toward Testable Theories," American Journal of Sociology 101/1 (1996): 1060-1073; Alice H. Amsden, Jacek Kochanowicz, and Lance Taylor, The Market Meets its Match: Restructuring the Economies of Eastern Europe (Cambridge: Harvard University Press, 1994).
16. I do not deny the role of elites and power politics, and the events of autumn 1998 demonstrate their importance: elite rebellion against Sergei Kirienko's stricter tax policies and reforms, and Yeltsin's subsequent surrender to them and his replacement of Kirienko with consummate insiders Viktor Chernomyrdin and Yevgenii Primakov. However, elite politics do not automatically shape all actions and strategies by the remaining 99 percent of economic actors. We must be aware of elite politics and structural outcomes, but we cannot leave the picture at that alone - we must look at how the vast majority of Russian businessmen take part in reconstructing and reproducing a new economic system.
17. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Row, 1976); E. P. Thompson, The Making of the English Working Class (New York: Pantheon, 1964); Karl Polanyi, The Great Transformation (Boston: Beacon Hill, 1944);
18. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Row, 1976); E. P. Thompson, The Making of the English Working Class (New York: Pantheon, 1964); Karl Polanyi, The Great Transformation (Boston: Beacon Hill, 1944);
19. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Row, 1976); E. P. Thompson, The Making of the English Working Class (New York: Pantheon, 1964); Karl Polanyi, The Great Transformation (Boston: Beacon Hill, 1944);
20. Emile Durkheim, The Division of Labor in Society (Glencoe, IL: Free Press, 1933), trans. George Simpson;
21. Samuel Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968);
22. Barrington Moore, The Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
23. This is the theoretical strategy often employed by macroscopical approaches, such as that of Barrington Moore, Social Origins, and Theda Skocpol, States and Social Revolutions (New York: Cambridge University Press, 1979).
24. This is the theoretical strategy often employed by macroscopical approaches, such as that of Barrington Moore, Social Origins, and Theda Skocpol, States and Social Revolutions (New York: Cambridge University Press, 1979).
25. See for example the frameworks used by Charles, Tilly, Popular Contention in Great Britain (Cambridge: Harvard University Press, 1995) and John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997). See also Mustafa Emirbayer, "Manifesto for a Relational Sociology," American Journal of Sociology 103/2 (September 1997): 281-317. For an interesting empirical (as opposed to theoretical) argument for focusing on process - especially on the importance of contingency and tactics - see James McPherson, Battle Cry of Freedom (New York: Oxford University Press, 1988), Conclusion.
26. See for example the frameworks used by Charles, Tilly, Popular Contention in Great Britain (Cambridge: Harvard University Press, 1995) and John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997). See also Mustafa Emirbayer, "Manifesto for a Relational Sociology," American Journal of Sociology 103/2 (September 1997): 281-317. For an interesting empirical (as opposed to theoretical) argument for focusing on process - especially on the importance of contingency and tactics - see James McPherson, Battle Cry of Freedom (New York: Oxford University Press, 1988), Conclusion.
27. See for example the frameworks used by Charles, Tilly, Popular Contention in Great Britain (Cambridge: Harvard University Press, 1995) and John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997). See also Mustafa Emirbayer, "Manifesto for a Relational Sociology," American Journal of Sociology 103/2 (September 1997): 281-317. For an interesting empirical (as opposed to theoretical) argument for focusing on process - especially on the importance of contingency and tactics - see James McPherson, Battle Cry of Freedom (New York: Oxford University Press, 1988), Conclusion.
28. See for example the frameworks used by Charles, Tilly, Popular Contention in Great Britain (Cambridge: Harvard University Press, 1995) and John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997). See also Mustafa Emirbayer, "Manifesto for a Relational Sociology," American Journal of Sociology 103/2 (September 1997): 281-317. For an interesting empirical (as opposed to theoretical) argument for focusing on process - especially on the importance of contingency and tactics - see James McPherson, Battle Cry of Freedom (New York: Oxford University Press, 1988), Conclusion.
29. I draw here on Max Weber, especially General Economic History, and contemporary neo-Weberian works, e.g., Gary Hamilton and Nicole Woolsey Biggart, "Market, Culture, and Authority: A Comparative Analysis of Management and Organization in the Far East," American Journal of Sociology 94 (Supplement, 1988): S52-S94.
30. I draw here on Max Weber, especially General Economic History, and contemporary neo-Weberian works, e.g., Gary Hamilton and Nicole Woolsey Biggart, "Market, Culture, and Authority: A Comparative Analysis of Management and Organization in the Far East," American Journal of Sociology 94 (Supplement, 1988): S52-S94.
31. See, for example, the chapters collected in Christopher Clague and C. Gordon Rausser, Emerging Market Economies in Eastern, Europe (Cambridge: Basil Blackwell, 1992).
32. Neil Fligstein, The Transformation of Corporate Control (Cambridge: Harvard University Press, 1990); Robert Wuthnow, Communities of Discourse (Cambridge: Harvard University Press, 1989).
33. Neil Fligstein, The Transformation of Corporate Control (Cambridge: Harvard University Press, 1990); Robert Wuthnow, Communities of Discourse (Cambridge: Harvard University Press, 1989).
34. In this way, incentives are embedded in cultural understandings. However, we must avoid oversimplistic models where culture is a magic wand explaining residual variance; but simply to brush aside any cultural explanation, as Burawoy appears to do, also oversimplifies the transitional process. Michael Burawoy, "Review Essay: The Soviet Descent into Capitalism," American Journal of Sociology 102/5 (March 1997): 1430-1444 (esp. 1438).
35. Peter Berger and Thomas Luckmann, The Social Construction of Reality (New York: Doubleday, 1966); Neil Fligstein, The Transformation of Corporate Control; Robert Wuthnow, Communities of Discourse. Neoinstitutionalists (e.g., Paul DiMaggio and Walter Powell) include power - isomorphism derives from power sources (e.g., state coercion, professional pressure) - but must develop power further. For example, Frank Dobbin shows the importance of cultural constructions without asking how power fits into the picture - an extremely detracting weakness when one asks how change occurs. See Dobbin, Forging Industrial Policy (New York: Cambridge University Press, 1994).
36. Peter Berger and Thomas Luckmann, The Social Construction of Reality (New York: Doubleday, 1966); Neil Fligstein, The Transformation of Corporate Control; Robert Wuthnow, Communities of Discourse. Neoinstitutionalists (e.g., Paul DiMaggio and Walter Powell) include power - isomorphism derives from power sources (e.g., state coercion, professional pressure) - but must develop power further. For example, Frank Dobbin shows the importance of cultural constructions without asking how power fits into the picture - an extremely detracting weakness when one asks how change occurs. See Dobbin, Forging Industrial Policy (New York: Cambridge University Press, 1994).
37. Peter Berger and Thomas Luckmann, The Social Construction of Reality (New York: Doubleday, 1966); Neil Fligstein, The Transformation of Corporate Control; Robert Wuthnow, Communities of Discourse. Neoinstitutionalists (e.g., Paul DiMaggio and Walter Powell) include power - isomorphism derives from power sources (e.g., state coercion, professional pressure) - but must develop power further. For example, Frank Dobbin shows the importance of cultural constructions without asking how power fits into the picture - an extremely detracting weakness when one asks how change occurs. See Dobbin, Forging Industrial Policy (New York: Cambridge University Press, 1994).
38. Peter Berger and Thomas Luckmann, The Social Construction of Reality (New York: Doubleday, 1966); Neil Fligstein, The Transformation of Corporate Control; Robert Wuthnow, Communities of Discourse. Neoinstitutionalists (e.g., Paul DiMaggio and Walter Powell) include power - isomorphism derives from power sources (e.g., state coercion, professional pressure) - but must develop power further. For example, Frank Dobbin shows the importance of cultural constructions without asking how power fits into the picture - an extremely detracting weakness when one asks how change occurs. See Dobbin, Forging Industrial Policy (New York: Cambridge University Press, 1994).
39. I do not deny the importance of social capital and social embeddedness; however, they act as conduits for transmitting and reinforcing ultimate cultural concepts. Further, the creation and reification of economic institutions requires a move away from social ties to formal rules. Finally, social capital also has cultural roots - what networks and ties mean in terms of relations, what a strong or weak tie is, what can be expected or demanded, etc. For concern over space I do not address social capital and economic change here and it has been explored elsewhere: see the contributions to Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997).
40. See Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994).
41. This does not mean that selection necessarily is complete; and this especially does not mean that the outcome will be an economica ly efficient set of practices. New principles may be economically inefficient but politically efficient (or expedient); or they may simply conform to the whims of those with power in that economic field.
42. I have chosen the Russian case for several reasons: 1) I am familiar with the language, culture, and history, and so when embarking on a study of transitions it made sense to focus there; 2) The Russian case is more problematic than most because communism was strongest in Russia, not only because it was home-grown (and hence more legitimate than elsewhere) but also because Russia and former Soviet republics exhibited the longest history, giving the communist economic practices the strongest roots there.
43. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
44. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
45. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
46. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
47. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
48. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
49. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
50. Economic sociology has tried to reorient analysis with some success. Social embeddedness (social capital, networks) appears to dominate discourse. Some economic sociology has focused on power or culture: for example, William Roy, Socializing Capital (Princeton: Princeton University Press, 1997); Fligstein, The Transformation of Corporate Control; Frank Dobbin, Forging Industrial Policy; Viviana Zelizer, Pricing the Priceless Child (New York: Basic Books, 1985). The best source of ideas and inspiration may come less from economic sociology than from political sociology, which has focused more on process, power, and culture (in no small part because it has not been distracted by the same interdisciplinary tug-of-war in which economic sociology finds itself with economics). The most relevant political sociology literature concerns revolutions - the political relative to transitions (especially in Eastern Europe) and economic change. Those works most influential on this article are John Markoff's The End of Feudalism, Charles Tilly's Popular Contention in Great Britain, Lynn Hunt's Politics, Culture, and Class in the French Revolution (Berkeley: University of California Press, 1984), and Liah Greenfeld's Nationalism: Five Roads to Modernity (Cambridge: Harvard University Press, 1992).
51. David Stark and Laszlo Bruszt, Postsocialist Pathways (New York: Cambridge University Press, 1998). Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997).
52. David Stark and Laszlo Bruszt, Postsocialist Pathways (New York: Cambridge University Press, 1998). Gernot Garber and David Stark, editors, Restructuring Networks in Post-Socialism (New York: Oxford University Press, 1997).
53. This problem may be less significant for Eastern Europe than the former U.S.S.R. because institutional legacies of legal, formal pseudo-market structures were more prominent in Hungary or Poland than in the U.S.S.R.
54. Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions," American Sociological Review 61 (1996): 656-673.
55. Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions," American Sociological Review 61 (1996): 656-673.
56. For example, Max Weber, General Economic History (Glencoe, IL: Free Press, 1950), trans. Frank Knight; see also Randall Collins, "Weber's Last Theory of Capitalism," in Mark Granovetter and Richard Swedberg, editors, The Sociology of Economic Life (Boulder: Westview, 1991). For another account of the rise of economic ground rules, see William Reddy, The Rise of Market Culture (New York: Cambridge University Press, 1984).
57. For example, Max Weber, General Economic History (Glencoe, IL: Free Press, 1950), trans. Frank Knight; see also Randall Collins, "Weber's Last Theory of Capitalism," in Mark Granovetter and Richard Swedberg, editors, The Sociology of Economic Life (Boulder: Westview, 1991). For another account of the rise of economic ground rules, see William Reddy, The Rise of Market Culture (New York: Cambridge University Press, 1984).
58. For example, Max Weber, General Economic History (Glencoe, IL: Free Press, 1950), trans. Frank Knight; see also Randall Collins, "Weber's Last Theory of Capitalism," in Mark Granovetter and Richard Swedberg, editors, The Sociology of Economic Life (Boulder: Westview, 1991). For another account of the rise of economic ground rules, see William Reddy, The Rise of Market Culture (New York: Cambridge University Press, 1984).
59. Alec Nove, The Soviet Economic System (Boston: Allen and Unwin, 1980); Joseph Berliner, The Innovation Decision in Soviet Industry (Cambridge: MIT Press, 1976).
60. Alec Nove, The Soviet Economic System (Boston: Allen and Unwin, 1980); Joseph Berliner, The Innovation Decision in Soviet Industry (Cambridge: MIT Press, 1976).
61. Paul DiMaggio and Walter Powell, "The Iron Cage Revisited," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis (Chicago: University of Chicago Press, 1991).
62. Fligstein suggests this as one means by which new conceptions of control spread -for example, the rise of professionally-trained MBAs led to the rise of the financial conception of control.
63. See Huntington, Political Order in Changing Societies.
64. One reason for debt arrears is that payment of past debts is often ignored (while payment up front for the present purchase may be demanded). Because bankruptcy is problematic and actors often are loathe to use it (for fear that others would use it on them) the only other factor affecting payment is resource dependency. Firms need money or goods for purchase, and so they become more concerned with present income. This need for income - imposed by monetization of the economy and the imperative to have something on hand in order to make a purchase - did impose a change in principles of production and sales. However, because bankruptcy has not been used widely, debt remains coded as secondary to other issues, such as maintaining the factory social safety net and employment.
65. See Lewis Siegelbaum, Stakhanovism and the Politics of Productivity (New York: Cambridge University Press, 1988).
66. This is the basic logic of neo-classical economics: bankruptcy, free movement of inputs (e.g., financial investment), cost-accounting, and free movement of labor (involving unemployment) all contribute to maintaining discipline. Firms must act efficiently if they are to make profit and survive in competition, and firms must produce profit if they are to continue existence and obtain investment down the line. Weber noted the importance of discipline for capitalism, especially a rationalizing form of discipline. Max Weber, The Protestant Ethic and the Spirit of Capitalism (New York: Scribner's, 1976), and General Economic History.
67. This is the basic logic of neo-classical economics: bankruptcy, free movement of inputs (e.g., financial investment), cost-accounting, and free movement of labor (involving unemployment) all contribute to maintaining discipline. Firms must act efficiently if they are to make profit and survive in competition, and firms must produce profit if they are to continue existence and obtain investment down the line. Weber noted the importance of discipline for capitalism, especially a rationalizing form of discipline. Max Weber, The Protestant Ethic and the Spirit of Capitalism (New York: Scribner's, 1976), and General Economic History.
68. I leave out one dimension of power fields: central versus regional governments. There is an obvious difference in political activity across regional governments, although its degree of importance is not entirely clear. However, I omit discussion of regional political variation for the following reasons: 1) I am trying to discuss actual economic activity rather than policies; 2) I am trying to show the creation of new economic principles, and regional governments tend to influence incentives more than perceptions; 3) To include this discussion would make this article longer and more cumbersome than it need be. Inclusion of regional governmental variation is best left for elsewhere.
69. See David Lipton and Jeffrey Sachs, "Creatirg a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity 1 (1990): 75-147; Christopher Clague and C. Gordon Rausser, Emerging Market Economies in Eastern Europe.
70. See David Lipton and Jeffrey Sachs, "Creatirg a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity 1 (1990): 75-147; Christopher Clague and C. Gordon Rausser, Emerging Market Economies in Eastern Europe.
71. For a similar criticism see Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995), chapter 1.
72. Alice Amsden, Asia's Next Giant (New York: Oxford University Press, 1989) and "Taiwan's Economic History: A Case of Etatisme and a Challenge to Dependency Theory," in Robert Bates, editor, Toward a Political Economy of Development (Berkeley: University of California Press, 1998); Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994); Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995). A classic formulation is Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
73. Alice Amsden, Asia's Next Giant (New York: Oxford University Press, 1989) and "Taiwan's Economic History: A Case of Etatisme and a Challenge to Dependency Theory," in Robert Bates, editor, Toward a Political Economy of Development (Berkeley: University of California Press, 1998); Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994); Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995). A classic formulation is Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
74. Alice Amsden, Asia's Next Giant (New York: Oxford University Press, 1989) and "Taiwan's Economic History: A Case of Etatisme and a Challenge to Dependency Theory," in Robert Bates, editor, Toward a Political Economy of Development (Berkeley: University of California Press, 1998); Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994); Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995). A classic formulation is Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
75. Alice Amsden, Asia's Next Giant (New York: Oxford University Press, 1989) and "Taiwan's Economic History: A Case of Etatisme and a Challenge to Dependency Theory," in Robert Bates, editor, Toward a Political Economy of Development (Berkeley: University of California Press, 1998); Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994); Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995). A classic formulation is Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
76. Alice Amsden, Asia's Next Giant (New York: Oxford University Press, 1989) and "Taiwan's Economic History: A Case of Etatisme and a Challenge to Dependency Theory," in Robert Bates, editor, Toward a Political Economy of Development (Berkeley: University of California Press, 1998); Miguel Centeno, Democracy Within Reason (University Park: Penn State Press, 1994); Peter Evans, Embedded Autonomy (Princeton: Princeton University Press, 1995). A classic formulation is Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966).
77. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
78. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
79. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
80. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
81. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
82. Douglass North and Robert Paul Thomas, The Rise of the Western World (New York: Cambridge University Press, 1973); John Zysman, Governments, Markets, and Growth (Ithaca: Cornell University Press, 1983); Ronald Coase "The Nature of the Firm," Economica N.S. 4 (1937): 386-405, and "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44; Janos Kornai, The Socialist System (Princeton: Princeton University Press, 992); John Campbell, "An Institutional Analysis of Fiscal Reform in Postcommunist Europe," Theory and Society 25 (1996): 45-84.
83. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 5 (1991): 59-76; "Evolution in Economics and in the Economic Reform of the Centrally Planned Economies," in Christopher Clague and Gordon Rausser, editors, Emerging Market Economies in Eastern Europe; Peter Murrell and Yijang Wang, "When Privatization Should Be Delayed: The Effect of Communist Legacies on Organizational and Institutional Reforms," Journal of Comparative Economics 17 (1993): 385-406.
84. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 5 (1991): 59-76; "Evolution in Economics and in the Economic Reform of the Centrally Planned Economies," in Christopher Clague and Gordon Rausser, editors, Emerging Market Economies in Eastern Europe; Peter Murrell and Yijang Wang, "When Privatization Should Be Delayed: The Effect of Communist Legacies on Organizational and Institutional Reforms," Journal of Comparative Economics 17 (1993): 385-406.
85. Peter Murrell, "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?" Journal of Economic Perspectives 5 (1991): 59-76; "Evolution in Economics and in the Economic Reform of the Centrally Planned Economies," in Christopher Clague and Gordon Rausser, editors, Emerging Market Economies in Eastern Europe; Peter Murrell and Yijang Wang, "When Privatization Should Be Delayed: The Effect of Communist Legacies on Organizational and Institutional Reforms," Journal of Comparative Economics 17 (1993): 385-406.
86. Michael Burawoy and Pavel Krotov, "The Soviet Transition from Socialism to Capitalism: Worker Control and Economic Bargaining in the Wood Industry," American Sociological Review 57 (1992): 16-38.
87. David Stark, "Recombinant Property in East European Capitalism," American Sociological Review 101/4 (1996).
88. Blasi et al., Kremlin Capitalism. In all fairness, these authors do point out the problem of changing economic rules and managers' perceptions; unfortunately, they do not make them a central issue for analysis.
89. Kathryn Hendley, "Legal Development and Privatization in Russia: A Case Study," Soviet Economy 8/2 (1992): 130-157; Michael Burawoy and Kathryn Hendley, "Between Perestroika and Privatization: Divided Strategies and Political Crisis in a Soviet Enterprise," Soviet Studies 44/3 (1992): 371-402.
90. Kathryn Hendley, "Legal Development and Privatization in Russia: A Case Study," Soviet Economy 8/2 (1992): 130-157; Michael Burawoy and Kathryn Hendley, "Between Perestroika and Privatization: Divided Strategies and Political Crisis in a Soviet Enterprise," Soviet Studies 44/3 (1992): 371-402.
91. My thanks to one reviewer from Theory and Society for posing the question this way. David Stark does make some observations about this point, but leaves the overall lesson vague: David Stark, "Recombinant Property in East European Capitalism." For a similar point on process and social change, see John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997).
92. My thanks to one reviewer from Theory and Society for posing the question this way. David Stark does make some observations about this point, but leaves the overall lesson vague: David Stark, "Recombinant Property in East European Capitalism." For a similar point on process and social change, see John Markoff, The Abolition of Feudalism (University Park: Penn State Press, 1997).
93. Paul DiMaggio and Walter Powell, "Introduction" and "The Iron Cage Revisited," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis; Frank Dobbin, Forging Industrial Policy; Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions.
94. Paul DiMaggio and Walter Powell, "Introduction" and "The Iron Cage Revisited," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis; Frank Dobbin, Forging Industrial Policy; Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions.
95. Paul DiMaggio and Walter Powell, "Introduction" and "The Iron Cage Revisited," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis; Frank Dobbin, Forging Industrial Policy; Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions.
96. Paul DiMaggio and Walter Powell, "Introduction" and "The Iron Cage Revisited," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis; Frank Dobbin, Forging Industrial Policy; Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics: A Political-Cultural Approach to Market Institutions.
97. There are some exceptions: for example, Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics"; Randall Collins, "Weber's Last Theory of Capitalism."
98. There are some exceptions: for example, Neil Fligstein, The Transformation of Corporate Control, and "Markets as Politics"; Randall Collins, "Weber's Last Theory of Capitalism."
99. This is particularly problematic for the "new institutionalism in organizational analysis." Neoinstitutionalist hypotheses generally are confirmed not by direct study of process or mechanisms, but rather of after-effects (e.g., watching how many firms adopt a policy, rather than studying how such policies get adopted). The problem of information access excuses much of this oversight, although not all. Until economic sociology gives birth to its own Alfred Chandler - a scholar with a sense of process, detail, and narrative - this problem will persist.
100. Perhaps the best examples in political sociology are: Charles Tilly, Popular Contention in Great Britain; William Sewell, Work and Revolution in
101. Perhaps the best examples in political sociology are: Charles Tilly, Popular Contention in Great Britain; William Sewell, Work and Revolution in France (New York: Cambridge University Press, 1980); Lynn Hunt, Politics, Culture, and Class in the French Revolution; Liah Greenfield, Nationalism. Five Roads to Modernity.
102. Perhaps the best examples in political sociology are: Charles Tilly, Popular Contention in Great Britain; William Sewell, Work and Revolution in France (New York: Cambridge University Press, 1980); Lynn Hunt, Politics, Culture, and Class in the French Revolution; Liah Greenfield, Nationalism. Five Roads to Modernity.
103. Perhaps the best examples in political sociology are: Charles Tilly, Popular Contention in Great Britain; William Sewell, Work and Revolution in France (New York: Cambridge University Press, 1980); Lynn Hunt, Politics, Culture, and Class in the French Revolution; Liah Greenfield, Nationalism. Five Roads to Modernity.
104. This in part accounts for "economic imperialism" and the spread of rational choice: a realization of theoretical inconsistency by assigning different theories and assumptions to different social spheres.
105. This is inspired by Ann Swidler, "Culture in Action: Symbols and Strategies," American Sociological Review 51/2 (April 1986): 273-286.
106. See Richard Nelson and and Sidney Winter, An Evolutionary Theory of Economic Change (Cambridge: Harvard University Press, 1982).
107. This is akin to Weber's idea that "civilizational" factors will shape the import of new notions and institutions. See Gary Hamilton, "Civilizations and the Organization of Economies," in Neil J. Smelser and Richard Swedberg, editors, The Handbook of Economic Sociology (Princeton University Press, 1994), 183-205.
108. Kommersant Daily, 6/13/96, p. 5; see the law (zakon) "O Tsentral'nom banke Rossiiskoi Federatsii (Banke Rossii)," at ht:p://black.inforis.nnov.su/infobase (database on legal acts and legislation out of Nizhny Novgorod).
109. Kommersant Daily, 6/13/96, p. 5; see the law (zakon) "O Tsentral'nom banke Rossiiskoi Federatsii (Banke Rossii)," at ht:p://black.inforis.nnov.su/infobase (database on legal acts and legislation out of Nizhny Novgorod).
110. Smena, 6/25/92, p. 3. The bank worker was fired - one small step toward banking professionalism.
111. This may suggest that objective rational action - utility or profit maximization - was at work, not any cultural tool kits. I do not deny that actors calculate their own benefits; however, what is crucial is just how they code what their utility is. Is it simply making money any way or in an honorable way? Is it running a bank into the ground to get rich, or is it running a healthy bank and slowly accumulating both profit and prestige? It is here that a "hard" version of rational choice, relying solely on exogenous objective measurements of utility, runs into trouble.
112. See, for example: "Erlan," Kommersant (on-line) #10, 3/21/95; "Aktual'naia tema: valiutnyi koridor," Kommersant (on-line) #25, 7/11/95; "Staraia politika v novykh usloviiakh: ne skoro poliany travoi zarastut," Ekspert #0, 7/11/95.
113. See, for example: "Erlan," Kommersant (on-line) #10, 3/21/95; "Aktual'naia tema: valiutnyi koridor," Kommersant (on-line) #25, 7/11/95; "Staraia politika v novykh usloviiakh: ne skoro poliany travoi zarastut," Ekspert #0, 7/11/95.
114. See, for example: "Erlan," Kommersant (on-line) #10, 3/21/95; "Aktual'naia tema: valiutnyi koridor," Kommersant (on-line) #25, 7/11/95; "Staraia politika v novykh usloviiakh: ne skoro poliany travoi zarastut," Ekspert #0, 7/11/95.
115. "Malye banki tozhe imeiut pravo na zhizn," Firansovye (on-line), 9/29/95.
116. "Valiutnyi koridor i bankovskii krizis: proiavlenie negativa," Ekspert #4, 9/5/95; "Uroki avgusta obeshchaiut ukhod s rynka nekonkurentnykh bankovskikh struktur," Finansovye izvestiia (on-line), 9/12/95.
117. "Valiutnyi koridor i bankovskii krizis: proiavlenie negativa," Ekspert #4, 9/5/95; "Uroki avgusta obeshchaiut ukhod s rynka nekonkurentnykh bankovskikh struktur," Finansovye izvestiia (on-line), 9/12/95.
118. Not that this has been entirely successful: banks did switch to using Treasury bills for speculative purposes (although T-bills were used as a simple store of value and short-term investment as well). This is one reason behind the collapse of the financial system in 1998: banks invested too much money in T-bills without having enough reserve capital to weather storms. The result might be more bankruptcies and revocations of bank licenses, which one official at the Central Bank claimed was going to happen anyway: "Prichiny padeniia rublia - chisto psikhologicheskie," Ekspert #34, 9/14/98. However, banks cannot shoulder all the blame for September 1998: the state and political elite deserve blame, too.
119. One firm I observed, a small economics publishing house, obtained loans from Northern Trade through personal ties rather than through submitting a worked-out business plan and strategies for realizing it. While this firm lived on the brink of bankruptcy through 1995 and early 1996, they were under little pressure to pay off their loans (and hence change behavior) because Northern Trade did not pursue the issue. However, in the middle of 1996 new bank management did pursue loan repayment, forcing the firm to turn over its books and journals in lieu of the loan and interest.
120. Such isomorphic pressures and resulting "professionalization" were described to me by interviewees working as consultants (inside and outside banks) and some members of banking management staffs in St. Petersburg.
121. At one seminar I was able to observe, an example of depreciation came up, where machinery costing 200,000 rubles had depreciated to 170,000, with a figure of "30,000" placed in the debit column. The room erupted: why 30,000, why in the debit column, where did depreciation come from? Only a few individuals shook their heads and snickered at their colleagues.
122. New York Times, 8/27/98, 1.
123. "Banky: kto vyzhivet?" Argumenty i fakty #37 (1998): 6. For a slightly different take on small banks, see Iurii Shor, "Malye banky orientiruiutsia na korporativnykh klientov," Finansovye izvestiia, 9/22/98; Jeanne Whalen, "Smaller Banks Replace Giants in Ratings,' Moscow Times (on-line), 12/11/98; Kommersant Dengi, 12/9/98 (entire issue).
124. "Banky: kto vyzhivet?" Argumenty i fakty #37 (1998): 6. For a slightly different take on small banks, see Iurii Shor, "Malye banky orientiruiutsia na korporativnykh klientov," Finansovye izvestiia, 9/22/98; Jeanne Whalen, "Smaller Banks Replace Giants in Ratings,' Moscow Times (on-line), 12/11/98; Kommersant Dengi, 12/9/98 (entire issue).
125. "Banky: kto vyzhivet?" Argumenty i fakty #37 (1998): 6. For a slightly different take on small banks, see Iurii Shor, "Malye banky orientiruiutsia na korporativnykh klientov," Finansovye izvestiia, 9/22/98; Jeanne Whalen, "Smaller Banks Replace Giants in Ratings,' Moscow Times (on-line), 12/11/98; Kommersant Dengi, 12/9/98 (entire issue).
126. "Banky: kto vyzhivet?" Argumenty i fakty #37 (1998): 6. For a slightly different take on small banks, see Iurii Shor, "Malye banky orientiruiutsia na korporativnykh klientov," Finansovye izvestiia, 9/22/98; Jeanne Whalen, "Smaller Banks Replace Giants in Ratings,' Moscow Times (on-line), 12/11/98; Kommersant Dengi, 12/9/98 (entire issue).
127. "Smaller Banks Leap in New Ratings List," Moscow Times (on-line), 10/13/98.
128. "Prosecutor: Crisis May Spur Arrests of Banker," Moscow Times (on-line), 10/ 14/98. Investigations in January 1999 discovered the Central Bank held money in offshore accounts, although as of this writing the exact details (how the Central Bank did so, the exact amount, etc.) are not clear. This had led to some speculation that the Bank could come under increased scrutiny from the outside and lose some autonomy. On the other hand, the problems (and failures) of Russian banks may give the Central Bank opportunity to expand its power. The organization "ARKO" has been created to deal with restructuring larger banks and handle problems of depositors' accounts and liquidity. ARKO could serve as an additional institutional tool for Central Bank power. The future of Central Bank power - continuity, weakening, or strengthening - is not clear, although I suspect little will change in the short term.
129. Andrei Kuznetsov and Olga Kuznetsova, "Privatisation, Shareholding and the Efficiency Argument: Russian Experience," Europe-Asia Studies 48 (1996): 1179.
130. E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 19.
131. Even here the transition has not been smooth. Banks continue to face problems during the process of "weeding out" weaker banks (e.g., those that do not play by the Central Bank's rules, which "healthy" banks are assumed to play by). Bank headquarters still have problems overseeing and controlling their branches, resulting in continuing problems for banks. However, because the Central Bank's control over licenses - the equivalent to bankruptcy in the industrial world - is operative, the transformational process has been under way more quickly and smoothly than elsewhere.
132. See the interview with Igor Lipsits of the Russian Union of Manufacturers and Entrepreneurs, "Ekonomike nuzhny tselevye gosudarstvennye orientiry," Ekonomist #4 (1994): 40-48. Lipsits describes the problems firms have had finding outlets for selling their own goods. In one memorable case, a perfume maker could not sell his goods through independent wholesalers and the retailers; the drop in demand for his goods threatened the maker of the perfume bottles, who took it upon himself to set up a network for distributing the perfume to Russian stores. In another case, a clothing manufacturer had to send some workers in a truck to drive around Russia in search of stores that would buy the clothes. See also I. Gurkov and Ie. Avraamova, "Strategii vyzhivaniia promyshlennykh predpriiatii v novykh usloviiakh," Voprosy ekonomiki #6 (1995): 24.
133. See the interview with Igor Lipsits of the Russian Union of Manufacturers and Entrepreneurs, "Ekonomike nuzhny tselevye gosudarstvennye orientiry," Ekonomist #4 (1994): 40-48. Lipsits describes the problems firms have had finding outlets for selling their own goods. In one memorable case, a perfume maker could not sell his goods through independent wholesalers and the retailers; the drop in demand for his goods threatened the maker of the perfume bottles, who took it upon himself to set up a network for distributing the perfume to Russian stores. In another case, a clothing manufacturer had to send some workers in a truck to drive around Russia in search of stores that would buy the clothes. See also I. Gurkov and Ie. Avraamova, "Strategii vyzhivaniia promyshlennykh predpriiatii v novykh usloviiakh," Voprosy ekonomiki #6 (1995): 24.
134. Although this is actually more complex: see Alan Blinder et al., Asking About Prices: A New Approach to Understanding Price Stickiness (New York: Russell Sage, 1998).
135. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
136. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
137. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
138. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
139. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
140. Max Weber, General Economic History; see also Fligstein, The Transformation of Corporate Control, chapter 4. This is also central to Alfred Chandler's interpretation of business history: see his The Visible Hand (Cambridge: Harvard University Press, 1977) and Scale and Scope (Cambridge: Harvard University Press, 1990). The rationalization thesis does have its critics, such as Fernand Braudel, Civilization and Capitalism, 15th-18th Century, Vol. 2: The Wheels of Commerce (Berkeley: University of California Press, 1992), 400-402, 566-568. However, if the rationalization thesis is thought of in terms of formalization, control, and discipline, then Weber receives support from Michele Foucault. My thanks to Miguel Centeno for pointing out the links between capitalism and discipline (and thus rationalization) and Weber and Foucault. For a contrary empirical view on rationalization, see Melville Dalton, Men who Manage (New York: John Wiley and Sons, 1959).
141. S. Tsukhlo, "Formirovanie obemov i struktury vypuska rossiiskikh promyshlennykh predpriiatii," Voprosy ekonomiki #6 (1995): 36.
142. See E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 15-21; T. Dolgopiatova and I. Evseeva, "Ekonomicheskoe povedenie promyshlennykh predpriiatii v perkhodnoi ekonomike," Voprosy ekonomiki #8, (1994): 40-50; Bary Ickes and Randi Ryterman, "The Interenterprise Arrears Crisis in Russia," Post-Soviet Affairs 8 (1992): 331-361.
143. See E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 15-21; T. Dolgopiatova and I. Evseeva, "Ekonomicheskoe povedenie promyshlennykh predpriiatii v perkhodnoi ekonomike," Voprosy ekonomiki #8, (1994): 40-50; Bary Ickes and Randi Ryterman, "The Interenterprise Arrears Crisis in Russia," Post-Soviet Affairs 8 (1992): 331-361.
144. See E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 15-21; T. Dolgopiatova and I. Evseeva, "Ekonomicheskoe povedenie promyshlennykh predpriiatii v perkhodnoi ekonomike," Voprosy ekonomiki #8, (1994): 40-50; Bary Ickes and Randi Ryterman, "The Interenterprise Arrears Crisis in Russia," Post-Soviet Affairs 8 (1992): 331-361.
145. This shock has been mitigated by the widespread use of barter. While the percentage of transactions conducted in barter will probably never be precisely known, it is large - up to 70 percent of transactions for some companies. The result of barter has been that perceptions of solvency and demand (discussed later) have been affected: a firm may not have cash, but it has goods, and hence can pay for orders. In a sense, the use of barter has watered down the impulse of monetization to enforce new principles of production and sales.
146. Examples of these include a Petersburg electronics firm where the author conducted interviews, the Sverdlov machine-making plant, and the Baltika beer enterprise in St. Petersburg.
147. Not that these mechanisms (state and CPSU) were perfect; especially in the Brezhnev era, disciplining became less of a priority. Further, state and Party cadres had difficulty enforcing quasi-market practices and principles before 1991 because 1) these cadres themselves either did not understand the principles or had interests tied to previous practices, and 2) actual policies under Gorbachev were often incoherent.
148. Note, as a contrast to Russia, the way Mexican technocrats were able to use the state and PRI to attain power and then push through reforms; see Centeno, Democracy Within Reason. 75. This was not an impossible shift, given that the Soviet economy was partially monetized. Money was the medium of exchange; the supply of money was controlled from Moscow, resulting in canceled debts, for example, and soft budgets.
149. As I noted earlier, barter mitigated the impact of monetization, although far from entirely.
150. For example, some pocket banks - banks created by groups of industrial firms primarily as a cheap and easy source of loans - became stingier lending to their parents. Leningradskii stankostroitel', 1/13/93, 1.
151. Svetlana, 6/24/92, 2.
152. Svetlana, 1/13/93, 1.
153. Svetlana, 6/3/93, 4.
154. Svetlana, 11/3/93, 2.
155. Kirovets #8, 1/16/92, 1.
156. Kirovets #60, 3/31/92, 3.
157. S. Tsukhlo, "Formirovanie obemov i struktury vypuska rossiiskikh promyshlennykh predpriiatii," Voprosy ekonomiki #6 (1995): 36.
158. Elektrosila #40, 12/8/92, 2; interview, assistant director for production, lathe-making firm, March 1995, St. Petersburg.
159. Svetlana #21, 6/19/91, 5; #19, 6/3/92, 2; #2, 1/22/92, 2; Elektrosila #10, 3/10/ 92, 3.
160. Svetlana #21, 6/19/91, 5; #19, 6/3/92, 2; #2, 1/22/92, 2; Elektrosila #10, 3/10/ 92, 3.
161. Svetlana #21, 6/19/91, 5; #19, 6/3/92, 2; #2, 1/22/92, 2; Elektrosila #10, 3/10/ 92, 3.
162. Svetlana #21, 6/19/91, 5; #19, 6/3/92, 2; #2, 1/22/92, 2; Elektrosila #10, 3/10/ 92, 3.
163. Interview (furniture manufacturer), Tula, November 1995.
164. Is this so different from behavior among Western firms? The answer is both yes and no. On the one hand, certainly one finds in the West entrepreneurs who do not understand market search and who think solely in terms of production. In fact, Fligstein has argued that this was a problem for large industrial firms until the Great Depression, when the "manufacturing conception of control" was wide-spread and managers thought in terms of product and not in terms of product markets. However, the importance of such a "cultural incongruity" is less important in capitalist nations, where several factors mitigate this: the existence of a large number of experts, consultants, and courses for the entrepreneur; and the existence of rules that demand certain behavior with penalty for lack of conformity (e.g., bankruptcy, inability to receive a loan without a business plan, etc.). Further, in capitalist countries certain overall principles exist and are, to a degree, shared in theory; capitalism has been achieved in these countries (although, as Fligstein points out, economic conceptions are always changing); in Russia, on the other hand, the transition is in part the creation of such baseline understandings.
165. T. Dolgopiatova and I. Evseeva, "Ekonomicheskoe povedenie promyshlennykh predpriiatii v perekhodnoi ekonomike," Voprosy ekonomiki #8 (1994): 42.
166. Dolgopiatova and Evseeva, "Ekonomicheskoe povedenie promyshlennykh predpriiatii," 42.
167. Elektrosila #40, 12/8/92, 2.
168. Interview (expert and economist), St. Petersburg, December 1995.
169. See John Meyer and Brian Rowan, "Institutionalized Organizations: Formal Structure as Myth and Ceremony," in Walter Powell and Paul DiMaggio, editors, The New Institutionalism in Organizational Analysis, 41-62.
170. Richard Nelson and Sidney Winter, An Evolutionary Theory of Economic Change (Cambridge: Harvard University Press, 1982).
171. Niklas Pettersson and Stefan Nordström, Western Perspectives on the Russian Shipbuilding Company Almaz (Linköping: Linköping Institute of Technology, 1994), 67, 104.
172. Leningradskii stankostroitel', 7/13/93, 1.
173. IESC is an American organization that brings retired American managers to Russia to give talks and free consultations on restructuring, market study, and overall market behavior and decision-making. The success of IESC's mission is difficult to assess.
174. "Concerning intersectoral diversification of manufacturing, world experience testifies thus: it [the FPG] is the best way to guarantee financial stability of producers and to guarantee the flow of capital from stagnating sectors to promising sectors." Sergei Batchikov and Iurii Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995), 4.
175. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
176. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
177. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
178. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
179. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
180. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
181. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
182. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
183. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
184. Irina Starodubrovskaia, "Financial-industrial Groups: Illusions and Reality," Communist Economies and Economic Transformation 7/1 (1995): 5-19; Larisa Gorbatova, "Formation of Connections between Finance and Industry in Russia: Basic Stages and Forms," Communist Economies and Economic Transformation 7/1 (1995): 21-34; Jane E. Prokop, "Industrial Conglomerates, Risk Spreading and the Transition in Russia,' Communist Economies and Economic Transformation 7/1 (1995): 35-50; Lev Frankel, "Financial-industrial Groups in Russia: Emergence of Large Diversified Private Companies," Communist Economies and Economic Transformation 7/1 (1995): 51-66; S. Batchikov and Iu. Petrov, "Formirovanie finansovo-promyshlennykh grupp i gosudarstvo," Rossiiskii ekonomicheskii zhurnal #2 (1995): 3-10; E. Batizi, Upolnomochennye banki i finansovopromyshlennaia integratsiia," Rossiiskii ekonomicheskii zhurnal #10 (1994): 42-46; Kh. Mingazov, "Stanovlenie novykh organizatsionno-khoziaistvennykh Struktur v rossiiskoi industrii," Rossiiskii ekonomicheskii zhurnal #9 (1993): 25-34, and #10 (1993): 50-60; Kommersant #35, 9/26/95; #47, 12/19/95.
185. See Yevgeny Kuznetsov, "Learning to Learn: Emerging Patterns of Enterprise Behavior in the Russian Defense Sector, 1992-1995," in Bartlomiej Kaminskii, editors, Eonomic Transition in Russia and the New States of Eurasia (Armonk, N.Y.: M. E. Sharpe, 1996); E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 20-21; I. Alimova, V. Buev, V. Golikova, and T. Dolgopiatova, "Problemy malogo biznesa glazami predprinimatelei," Voprosy ekonomiki #11 (1994), 119-120. My thanks also to Olga Patokina for sharing her research and insights; interview with the author, September 1997, University of Pittsburgh.
186. See Yevgeny Kuznetsov, "Learning to Learn: Emerging Patterns of Enterprise Behavior in the Russian Defense Sector, 1992-1995," in Bartlomiej Kaminskii, editors, Eonomic Transition in Russia and the New States of Eurasia (Armonk, N.Y.: M. E. Sharpe, 1996); E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 20-21; I. Alimova, V. Buev, V. Golikova, and T. Dolgopiatova, "Problemy malogo biznesa glazami predprinimatelei," Voprosy ekonomiki #11 (1994), 119-120. My thanks also to Olga Patokina for sharing her research and insights; interview with the author, September 1997, University of Pittsburgh.
187. See Yevgeny Kuznetsov, "Learning to Learn: Emerging Patterns of Enterprise Behavior in the Russian Defense Sector, 1992-1995," in Bartlomiej Kaminskii, editors, Eonomic Transition in Russia and the New States of Eurasia (Armonk, N.Y.: M. E. Sharpe, 1996); E. Belianova, "Motivatsiia i povedenie rossiiskikh predpriiatii," Voprosy ekonomiki #6 (1995): 20-21; I. Alimova, V. Buev, V. Golikova, and T. Dolgopiatova, "Problemy malogo biznesa glazami predprinimatelei," Voprosy ekonomiki #11 (1994), 119-120. My thanks also to Olga Patokina for sharing her research and insights; interview with the author, September 1997, University of Pittsburgh.
188. Simon Clarke, "The Enterprise in the Era of Transition," in Simon Clarke, editor, The Russian Enterprise in Transition (Cheltenham, U.K.: Edward Elgar, 1996); Michael Burawoy and Pavel Krotov, "The Soviet Transition from Socialism to Capitalism."
189. Simon Clarke, "The Enterprise in the Era of Transition," in Simon Clarke, editor, The Russian Enterprise in Transition (Cheltenham, U.K.: Edward Elgar, 1996); Michael Burawoy and Pavel Krotov, "The Soviet Transition from Socialism to Capitalism."
190. Leningradskii stankostroitel' #14, 4/16/91, 3.
191. Leningradskii stankostroitel' #36, 9/26/90, 3.
192. Leningradskii stankostroitel' #23, 11/4/94, 1.
193. Kirovets #9, 1/29/93, 1. This boss also complained that shopfloor bosses should not be responsible for searching for buyers: "I consider that the transfer of the search for orders to the shoulders of shopfloor bosses is bringing at the present time certain negative results, but it would be significantly more advantageous for the enterprise if this work were taken up on a professional basis by corresponding factory [i.e., central] services."
194. Kirovets #18, 2/19/93, 2.
195. Leningradskii stankostroitel' #9, 3/5/92, 2.
196. Positron was not alone in playing host to conflict between employers and employees. See Simon Clarke, editor, Conflict and Change in the Russian Industrial Enterprise (Cheltenham, U.K.: Edward Elgar, 1996).
197. In my interviews with managers, legal hindrances were cited as reasons for avoiding downsizing or shutting down subdivisions only once; the vast majority of responses involved perceived duties towards "their" workers, the inability simply to throw them out onto the street.
198. Certainly, paternalism also brought power to managers as well. See Simon Clarke, "The Enterprise in the Era of Transition."
199. Interview (enterprise subdivision, assistant director for production), St. Petersburg (Russia), March 1995.
200. Ministry of Finance of the Russian Federation, Predpriiatii na puti reform (polozhitel'nyi opyt raboty). Materialy soveschaniia rukovoditelei promyshlennykh predpriiatii. (Moscow: Ministry of Finance, 1993), p. 19.
201. Svetlana #34, 10/28/92, 6.
202. Interviews by the author with various assistant directors (anonymous), St. Petersburg (Russia), July 1997.
203. The crucial issue should be how path dependency works - and this depends on perception of what needs to change and the available tools for changing. For example, the Central Bank was a legacy of history; but it need not have been the autonomous center of the Russian financial world. One can imagine that, had reformers been tied to an East Asian rather than a Western economic model, the Ministry of Finance and State Property Committee would have organized Russian industry into financial-industrial groups influenced by the state (and in fact this was proposed); the banking sphere would have been the handmaiden of the state-industry alliance. Russia could have come to resemble South Korea - also a potentially path dependent result (given centralization in the Soviet system).
204. Fligstein, Transformation of Corporate Control.
205. This need not mean that the Defensive FPGs will disappear as the older generation dies off. If Defensive FPGs remain stable, they will reproduce the manufacturing conception of control. We should expect the following in the future: 1) Defensive FPGs that have emerged may remain, but their organizing principle will be less relevant over time as a new generation comes to power. In the future the Defensive FPG will not spread beyond existing Defensive FPGs. 2) Existing Defensive FPGs will be in tension with Financial FPGs over legitimacy of organizing principles. The role of state policy and resource ownership will be crucial in determining whether the Defensive FPG remains a viable form. (I suspect that Defensive FPGs, after the passing of the older generation, will follow the strategies of Financial FPGs, assuming that the latter remain the dominant conception of control. Fligstein suggests that the financial conception of control may be replaced by the emerging "shareholder value conception of control." See Fligstein, "Markets as Politics," 670.)
206. This is close to William Roy's and Neil Fligstein's interpretations o the rise of the corporate form and modern American capitalism. See William Roy, Socializing Capital (Princeton: Princeton University Press, 1997), and Neil Fligstein, The Transformation of Corporate Control.
207. This is close to William Roy's and Neil Fligstein's interpretations o the rise of the corporate form and modern American capitalism. See William Roy, Socializing Capital (Princeton: Princeton University Press, 1997), and Neil Fligstein, The Transformation of Corporate Control.
208. I address creating the invisible hand of authority elsewhere; paper available from the author on request.
209. New York Times, 8/26/98, 1 and 6, and 8/27/98, 1 and 10.
210. New York Times, 8/26/98, 1 and 6, and 8/27/98, 1 and 10.