Privatisation in the Russian Federation

Arup Banerji In exploring some of the contributory causes, mechanisms and impediments to privatisation in the Russian Federation, this paper argues that the process has been borne forward by the strength of a predominantly political calculus. By grounding the pro gramme in the free distribution of vouchers, the government has hoped to replace conservative directors of the Soviet- era with a shareholding citizenry and thereby impart an irreversibility to the reform process as a whole. The redistribution of state property is occurring in the absence of a requisitely clear legal framework, of external controls over management by shareholders and of mature financial institutions. This has furthered a novel form of bureaucratic dominance over state industry and quasi-criminal primacy over the distributive network. Consequently, this pivotal reformist strand has gained a formal, numerical success but lacks the attributes to underpin economic transformation in the direction of genuine private management.