Collective Management of Residential Housing in Russia: The Importance of Being Social

Abstract

Performance of Russian homeowners associations established to manage common property in residential housing is assessed using the stochastic frontier technique. Observed performance variations are explained by tangible and intangible assets, especially tenants’ social capital required to resolve the collective action problem and ensure accountability of managing bodies and outside contractors. Without sufficient civic competence homeowners associations become dysfunctional or prone to capture by vested interests. Voluntary creation of HOAs is a credible signal of tenants’ ability to utilize the benefits of joint ownership and management of housing infrastructure.

Keywords: common-pool resources, collective action, social capital, homeowners associations, transition region, Russia

JEL Classification: Z13, P27, O43, R23