Abstract
The third chapter provides an overview of the distinctive layout of Russia. In addition to providing some fundamental information on the country’s unique regional layout, it covers important aspects such as the extent of Russia’s spatial heterogeneity, its structural economic challenges, and its entrepreneurial climate.
Imagine that you had to share a room with an aggressive madman all your life. Moreover, you also had to play chess with him. On the one hand, you had to play so that you would not win and anger him with your victory; on the other, you had to play so subtly that he would not suspect that you allowed him to beat you. When the madman disappears, this precious skill and life-long experience of survival with a madman turns out to be redundant.
Fazil Iskander (Cited from Ledeneva (2013, p. 6)).
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Notes
- 1.
Originally, the Federation encompassed 89 territorial divisions in 1993; however, the number was reduced due to several mergers.
- 2.
Following the 2014 Crimean crisis, Russia incorporated the Republic of Crimea and the City of Sevastopol as constituent members into the Russian Federation, namely, as federal subjects with the status of a republic (i.e., Republic of Crimea) and a federal city (i.e., City of Sevastopol). Internationally, this is highly disputed, and neither federal subject is recognized as a part of Russia by most countries.
- 3.
Specifically, the Republics of North Ossetia, Kabardino-Balkaria, Karachaevo-Cherkessia, Dagestan, Kalmykia, Ingushetia, and Chechnya.
- 4.
That is, the North Caucasus Republics, Kalmykia, Altai, Tuva and the Far East regions Kamchatka Territory, Amur Region, and the Jewish Autonomous Region (Chepurenko 2011).
- 5.
The heads of the executive body of a regional subject of the Russian Federation are commonly referred to as governors, but titles may change between different regions.
- 6.
Between 1995 and 2005, governors were directly elected by the residents of the federal subjects. From 2005 to 2012, governors were appointed by the regions’ legislative bodies based on a list of recommended candidates by the President of the Russian Federation. The most recent change occurred in 2012, when the federal legislature allowed regions to choose whether to elect their governor either directly by popular vote or if the governor should be appointed by parliament (Remington 2015).
- 7.
The neglect of economic governance performance can be illustrated on the basis of the following example. Budget revenues in the Nenets Autonomous Okrug are heavily dependent on the price of oil, which dropped by more than 20% in 2016. Thanks to rigorous budget restrictions, the local governor could prevent an economic breakdown, and by the first half of 2017, budget revenues had risen again by almost 80%. However, regional population and elites were rather discontent; thus, the federal government ignored the economic achievements, and the governor was dismissed (Zubarevich 2017).
- 8.
Representatives of the security services and especially veterans of the Federal Protective Service.
- 9.
For example, Tula’s 2017 appointed governor seemed to have appeared essentially out of nowhere. His biography, however, revealed that his main qualification was 15 years of service as Mr. Putin’s personal bodyguard.
- 10.
Income tax for solo owners and profit tax for firms.
- 11.
For example, some Western nations, such as Austria or Spain, impose significantly higher entry barriers in terms of registration time and fees compared to Russia (Doing Business 2018).
- 12.
An illustrative example is provided by Fox and Heller (2000). In the early 1990s, the Swedish company Assidomän (today Sveaskog AB) acquired a 57% majority stake in the Karelia-based Segezhabumpron Paper Mill, one of Russia’s largest pulp and paper mills. Soon after, the company advanced a US$100 million plan to modernize the plant. However, concerns were raised that jobs could be cut. Backed by the local government, the mill’s employees challenged the legality of Assidomän’s initial purchase of shares and the plant’s managers faced physical threats and violence. After the regional government, the co-owner of the mill refused to contribute its share of working capital investment to keep the factory open, the restructuring plan was abandoned, and Assidomän wrote off its ownership of the paper mill (Fox and Heller 2000).
- 13.
TEA indicates the level of entrepreneurial activity at early stages, determined by the percentage of the 18–64 year-old population who are either nascent entrepreneurs or owner-managers of a new business. This is not a simple sum of the first two measures. If an entrepreneur is involved in both types of activity, he is counted only once. Nascent entrepreneurs are involved in setting up a business (up to 3 months old), whereas owner-manager own a new business that is up to 3.5 years old.
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Schlattau, M. (2021). The Distinctive Layout of Russia. In: Tilting at the Windmills of Transition. Societies and Political Orders in Transition. Springer, Cham. https://doi.org/10.1007/978-3-030-54909-1_3
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