Corporate Governance in Russia: Law, Instrumentality and Political Order

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This chapter examines the process of corporate governance reform in Russia in the two and a half decades following the fall of communism. The case of Russia is used to illustrate the limitations of the ‘designer’ paradigm, reflecting the view that the right laws and regulations will induce and steer social change. Instead, it is argued that formal law and design has had only a tangential role in defining social outcomes. This is not only because of the supply-side defects of design, demonstrated particularly in Russia’s early reforms. Drawing on extensive area studies and political science research, it is argued that corporate governance change has been defined primarily by the nature of the domestic political order. This order is characterised by the use of political rent-seeking as a key mechanism for protection and expansion of property rights, the particular nature of legality in the post-Soviet political regime, but also by a resurgent state seeking to redefine corporate relations in line with its priorities. In this process, formal laws and institutions have been used selectively and instrumentally – both at the level of law-making and implementation. These assertions have important policy implications, yet they also illustrate the difficulty of achieving a rule-based corporate governance environment in the absence of deep political reforms.
Original languageEnglish
Title of host publicationCorporate Governance in Developing and Emerging Markets
EditorsFranklin Ngwu, Onyeka Osuji, Frank Stephen
Number of pages16
ISBN (Print)978-1138955851
Publication statusPublished - 30 Dec 2016


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