BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 4/1999:
Managing uncertainty: Hierarchies, Markets and "Networks" in the Russian Timber Industry. 1991-1998
Barbara Lehmbruch ()
Abstract: The paper investigates institutional development in the
Russian forestry sector after 1991. As it argues, while there has been a
great degree of decentralization, original market-oriented reform
blueprints for the industry were only partially implemented. The reasons
for this can be found largely in the failure of weak state institutions to
standardize and universalize transactions. Attempts to restore top-down,
Moscow-centered branch administration in the form of a state committee have
equally failed. The paper asks how best to describe the highly
personalistic transactional landscape that has emerged from the failure of
hierarchies and markets. It argues that there is little evidence of
“clan”-style “directors’ networks” based on direct personal trust. Rather,
economic actors prefer a two-pronged strategy of dealing with environmental
uncertainty: While attempting to minimize environmental exposure by
establishing forms of vertical integration, they also they hedge their
exposure by maintaining multiple, often loose outside affiliations. This,
it is argued, applies to both the horizontal, business-to-business level
and to vertical clientelistic relations with state actors.
Keywords: Russia; timber industry; organizations; (follow links to similar papers)
33 pages, September 14, 1999
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