To Restructure or Not to Restructure: Informal Activities and Enterprise Behavior in Transition

Posted: 14 Nov 1998

See all articles by Clifford Gaddy

Clifford Gaddy

The Brookings Institution

Barry W. Ickes

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Date Written: February 1998

Abstract

We analyze the process of restructuring in Russia. The Russian economy is bifurcating as some enterprises restructure and reduce the distance to the market, while other enterprises exploit relationship capital to survive without restructuring. Survival in this environment depends on initial conditions and on investment in relations with officials. Enterprises can produce cash and non-cash goods, and this choice effects the survival possibilities in subsequent periods. Implications of the theory, with special reference to monetary policy, barter, intergovernmental fiscal relations, and Financial Industrial Groups, are discussed.

JEL Classification: L11, O53

Suggested Citation

Gaddy, Clifford G. and Ickes, Barry W., To Restructure or Not to Restructure: Informal Activities and Enterprise Behavior in Transition (February 1998). Available at SSRN: https://ssrn.com/abstract=139738

Clifford G. Gaddy (Contact Author)

The Brookings Institution ( email )

1775 Massachusetts Ave. NW
Foreign Policy Studies
Washington, DC 20036-2188
United States
202-797-6000 (Phone)
202-797-6004 (Fax)

Barry W. Ickes

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-863 2652 (Phone)
814-863-4775 (Fax)

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