Economic Perspectives on Privatization in Russia: 1990-1994
THOMAS E. WEISSKOPF
This chapter describes the policies, processes, and results of privatization in the waning years of the Soviet Union and the first few years of independent Russia. 1 It briefly discusses the early moves toward privatization in the Soviet Union before its collapse, outlines the objectives of the privatization program launched by radical reformers in newly independent Russia, and traces the subsequent development of Russian privatization policy. It then presents the results of Russian privatization as of the end of 1994 and ends with some general conclusions.
Mikhail Gorbachev was appointed general secretary of the Communist Party of the Soviet Union in March 1985, but it was not until 1987 that the economic reforms associated with his program of perestroika began to be implemented. Gorbachev was clearly trying to revitalize the Soviet socialist economy by expanding the role of markets and changing the incentives faced by managers of and workers in enterprises. He did not, however, envisage a changeover to capitalist forms of property ownership in productive assets. In effect, he was trying to convert the Soviet economic system from a centrally planned to a more market form of socialism, without the thorough privatization of state-owned enterprises. Instead, he encouraged the development of new "hybrid" types of property ownership and business organization, including enterprises whose structures were somewhere between the traditional Soviet state enterprises and conventional capitalist firms, such as "cooperatives"--small independent businesses legalized under perestroika legislation in the late 1980s--and "leased enterprises"--relatively autonomous enterprises leasing their assets from the