Determinants of Enterprise restructuring in Transition: Description of a Survey in Russian Industry

To achieve sustainable economic growth in transition countries, it is crucial that enterprise performance is improved. However, it is not a priori clear which factors are essential for this. For Russia, data to investigate the potential determinants of enterprise performance is scarce. Therefore, the survey described in this paper collects data on enterprise restructuring, ownership, competition, budget constraints and, particularly, institutions in Russian industry, covering the period between the start of 1992 and September 1999. On their own, the survey answers show a devastating restructuring crisis, massive privatization, rather weak competition, unexpectedly hard budget constraints, an overwhelmingly negative and relatively positive assessment of formal and informal institutions respectively, and largely the same ruling networks as before the start of market reforms. Ironically, tentative results based on this survey indicate that (un)important determinants of enterprise restructuring in Russian industry are exactly those on which, according to the response per se, least (most) reform has been accomplished. That is: stronger competition and better institutions go with more restructuring, while privatization and harder budget constraints do not. The substitution, to some extent, of informal for formal institutions may have prevented even worse restructuring figures, but the results also suggest that better formal institutions in general would have led to further improvements. <BR><BR>