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Continuity and Change: Institutions and Transition in the Russian Forest 2008:32 DOCTORAL T H E SIS Mats-Olov Olsson Mats-Olov Continuity and Change Continuity and Change Institutions and Transition in the Russian Forest Sector – Institutions and Transition in the Russian Transition Sector Forest – Institutions and Mats-Olov Olsson Luleå University of Technology Department of Business Administration and Social Sciences 2008:32 Division of Political Science Universitetstryckeriet, Luleå 2008:32|: 02-544|: - -- 08 ⁄32 -- DOCTORAL THESIS Continuity and Change Institutions and Transition in the Russian Forest Sector Mats-Olov Olsson Luleå University of Technology Department of Business Administration and Social Sciences Division of Political Science 2008 © Mats-Olov Olsson Doctoral Thesis 2008:32 Luleå University of Technology ISSN 1402-1544 ISRN LTU-DT--08/32--SE Printed in Luleå, Sweden, by Universitetstryckeriet To Marianne, Peter, Anton, and Tobias Preface The research reported in this thesis originated in the study Institutions and the Emergence of Markets – Transition in the Russian Forest Sector conducted within the Forestry Program at the International Institute for Applied Systems Analysis (IIASA), Austria, in the period 1997–2001. The study was subsequently continued at the Centre for Regional Science (Cerum) at Umeå University. The overarching objective of the studies reported in this thesis has been to analyse two issues, a) In what way are institutions important for a nation’s eco- nomic and political development, and b) In what way do institutions change? These issues are studied in the context of Russia’s transition from a command economy to a market based system. The turbulent Russian transition, characterised by extremely fast and nearly all-encompassing social change, offers a “laboratory” for investigating the still little known causes and character of institutional change. Since its inception the project has developed dynamically for over ten years. During its first 3–4 years major attention was focused on the issue of whether or not there existed institutional hurdles for a market efficient development of the Russian forest sector after the disintegration of the Soviet Union in 1991 (see article I). Subsequently, after having verified the existence of such hurdles and analysed their character, our main attention was transferred to the issue of how the existing institutional framework might be modified to better serve the development towards a market efficient Russian forest sector. In an action oriented approach, using policy exercises as a tool for systemic intervention, an attempt was made to initiate participatory policy formulation processes with Russian forest stakeholders with the purpose of generating proposals for improved regional forest policies (II). In 2005 an attempt was made to re-assess the quality of the institutional framework governing enterprise behaviour in the Russian forest sector to see if the “rules-in- use” now had become better adapted to the requirements of a market economy (III). Finally, in the most recent phase of the project, attention was shifted again to issues relating to the functioning of the Russian political system, assessing demo- cratisation and the development of an efficient system of governance (IV). The outcome of these analyses is recounted and discussed in the introduction to this thesis and in the four appended articles. During the first IIASA based phase of the project a series of case studies of the institutional embedding of the forest sector in eight Russian regions was performed by a small core team of IIASA researchers in collaboration with a number of Russian colleagues and PhD students enrolled in the institute’s Young Scientists Summer Program. The intense intellectual exchange in this research group has meant a lot for me and my work with this thesis and I would like to express my gratitude to everyone involved in the project. It is not possible to list all of these v former colleagues here, but their names can be found in the study’s List of Publications (see Appendix B). A number of people must, however, be named for all the encouragement and support they offered me during the work with this thesis. First of all I would like to thank my friend and thesis supervisor, Prof. Lars Carlsson, and his colleague, Prof. Nils-Gustav Lundgren, of Luleå University of Technology for their enthusiastic support and invaluable advice. I would also like to thank Prof. Sten Nilsson, vice director of IIASA and leader of the institute’s Forestry Program, without whose initiative and persistent support the “institutional framework” study would never have materialised. Over the years Sten has also promptly read my various drafts and responded to my questions with exceptional punctuality and sense for expedi- ency. Several other colleagues and friends at IIASA are also remembered with affection for their support and lively company, including Prof. Anatoly Shvidenko, Dr. Michael Obersteiner, Dr. Soili Nysten-Haarala, Dr. Ian McCallum, Mrs. Cynthia Festin, Mrs. Shari Jandl, Dr. Mattias Jonas, and Dr. Vladimir Stolbovoi. Both before and after my stay at IIASA I have been working at the Centre for Regional Science (Cerum) of Umeå University. The director of Cerum, Prof. Lars Westin, has been of great help in finding solutions to the many intricate problems with regard to science as well as finance that repeatedly have threatened to put a premature end to my work with this thesis. I sincerely thank him for his efforts. I have always felt well taken care of on my somewhat irregular visits to Luleå and the Division of Political Science. Thanks to all of you at the department for making me feel welcome. Finally, I would like to thank my wife Marianne and my sons Peter, Anton, and Tobias, for allowing me to get absorbed by my work, treating me with the con- sideration and respect that kind people bestow upon the derelict. Thank you ever so much for your stubborn support forcing me finally to finish the task of writing this thesis. Funding for the study of which this thesis is a part has been provided by the FRN – the Swedish Council for Planning and Coordination of Research and sub- sequently by Formas – the Swedish Research Council for Environment, Agricul- tural Sciences and Spatial Planning, the successor of FRN as the Swedish member organization of IIASA. The generous support from these two research councils is hereby gratefully acknowledged. The study also received financial support from the Swedish Academy of Sciences, the Kempe Foundations, and the Västerbotten County Administrative Board, as well as from IIASA itself and Cerum, Umeå University. Umeå, 8 May 2008 Mats-Olov Olsson vi Table of Contents PREFACE ...................................................................................................................... v TABLE OF CONTENTS ............................................................................................... vii 1. INTRODUCTION ................................................................................................ 1 1.1 Background ...................................................................................................... 1 1.2 Organisational Setting and Purpose of the Study ............................................ 3 1.3 Basic Assumptions ........................................................................................... 6 1.4 Analytical Approach ........................................................................................ 7 2. TRANSITION,INSTITUTIONAL CHANGE AND DEMOCRATISATION IN RUSSIA –ANOTE ON THEORY ................................................................. 10 2.1 Setting the Stage ............................................................................................ 10 2.2 Transition the Russian Way ........................................................................... 13 2.3 Institutional Change in the Russian Context .................................................. 17 2.4 Democracy, Democratisation and Trust-Building Policy-Making ................ 21 3. OVERVIEW OF APPENDED ARTICLES ........................................................... 27 I. The Russian Detour: Real Transition in a Virtual Economy? ....................... 27 II. Systemic Interventions to Promote Institutional Change in the Russian Forest Sector ..................................................................................... 31 III. The Russian Virtual Economy Turning Real: Institutional Change in the Arkhangelsk Forest Sector ...................................................................... 34 IV. Assessing the Structural Prerequisites for an Efficient Russian Political Market .............................................................................................. 40 4. PERTINENT RESULTS OF THE STUDY ........................................................... 47 4.1 Merits of Using an Institutional Approach and Opportunities Foregone ...... 47 4.2 Characteristic Features and Persistent Problems of the the Russian Transition in Its First Decade ......................................................................... 48 4.2.1 Consequences for Enterprise Restructuring and the Prospects of Establishing an Efficient Market Economy ........................................ 51 4.2.2 Consequences for Citizens and Employees ........................................ 53 4.2.3 Consequences for Democracy and the Implementation of Public Policies ..................................................................................... 54 4.3 The Russian Transition in Its
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