ECONOMICS, FINANCE, AND BANKING
The U.S.S.R., before its decentralization and eventual breakup, had begun to try to reform its economic system, including banking practices and bank regulation and currency policy. The development of a viable financial system in the Russian Federation, as well as in other states of the former U.S.S.R., is a unique process with little applicable precedent in the modern world. The seven chapters in Part VII provide an overview of the early development of these financial systems.
Robert B. Charles' paper correctly observes that historic free market forces inside the former U.S.S.R. and the nature and pace of regional economic redevelopment will occur more rapidly in the absence of premature political reunion. Charles asserts four reasons why the former republics should be encouraged to develop independently: (1) cultural cohesion can be a positive economic force; (2) all-Union economies of scale are illusory; (3) pre-Soviet economic history reveals inherent entrepreneurial spirit; and (4) post-Soviet economic history confirms the Russian indigenous entrepreneurial spirit.
The paper by Jonah Otelsberg recognizes that the "marketing concept" of organizing economic activity is less appropriate in a society where the reigning reality is scarcity. The paper suggests that the former U.S.S.R cannot create a market economy by copying the institutions and behaviors that now exist in the Western nations. Instead, Otelsberg stresses that the former Soviet Union must go through the stages that the Western countries have gone through in their transition from economies driven by limited demand.
Temiruz A. Beridze's paper addresses "economic sovereignty" during Russia's transitional period to a market economy. The paper concludes that political and economic sovereignty are both distinct and interconnected elements of a single whole. The paper stresses the need to improve the economy in order to improve the political sphere.
Olga Floroff s paper traces the development of Russia's corporate and jointventure laws. The paper discusses the emergence of joint-stock companies in the former U.S.S.R. and the centralization of these companies through the Ministry of Finance of the RSFSR. Floroff concludes that while the new RSFSR laws encourage foreign investment, the instability of the region comprising the former U.S.S.R. slows down the pace of development of business relations