State Ownership in the Russian Economy: Its Magnitude, Structure and Governance Problems

Abstract

This article analyzes the extent and sectoral distribution of state ownership in the Russian economy. The different legal forms of state-owned enterprises (SOEs) in Russia are described. Official data on the evolution of the size of the state sector is provided, where the size is measured by the number of SOEs, their share in employment, fixed assets, investment and industrial production. The sectoral distribution of SOEs, the degree of their internationalization and data on the subset of listed SOEs are described. The latter gives a picture of a much stronger involvement of the government in medium and large sized companies than what can be inferred from the official data. Furthermore, this article discusses the objectives and challenges for corporate governance of SOEs in Russia, and provides an international perspective of the performance of SOEs as compared to privately owned companies. Recent trends in the policy and management of state property are presented. The problems of corporate governance in Russia are described in an agency perspective, and survey evidence on corporate governance and transparency of Russian SOEs is provided. Particular attention is given to the legal construction of the state corporation. The final section on the performance effects of state ownership summarizes the key contributions in the international economic literature in this field.

Keywords: state-owned enterprises, state ownership, nationalization, corporate governance, state corporation, Russia

JEL Classification: D21, G32, G34, G38, P31