Determinants of Barter in Russia: An Empirical Analysis

Posted: 29 Mar 2002

See all articles by Simon John Commander

Simon John Commander

London Business School; IZA Institute of Labor Economics

Irina Dolinskaya

International Monetary Fund (IMF)

Christian Mumssen

International Monetary Fund (IMF)

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Abstract

This paper analyzes the causes and consequences of non-monetary transactions in Russia, drawing on a large enterprise survey. We show that barter and offsets are linked to liquidity problems at the level of the firm and to arrears in particular. We find evidence that the state has channeled implicit subsidies to enterprises in the form of tax and utility offsets. The findings help explain the rise of non-monetary transactions during much of the 1990s. We show that non-monetary transactions inhibit enterprise restructuring. Our findings suggest that a policy solution to the non-cash problem would require the state and public utilities to phase out arrears and offsets.

Keywords: Barter, Tax offsets, Non-monetary transactions, Arrears, Trade credit, Russia, Transition, Subsidies, Restructuring

JEL Classification: D43, G3, H25, L14, P31, P35

Suggested Citation

Commander, Simon John and Dolinskaya, Irina and Mumssen, Christian, Determinants of Barter in Russia: An Empirical Analysis. Journal of Development Economics, Vol. 67, Issue 2, pp. 275-307. Available at SSRN: https://ssrn.com/abstract=305286

Simon John Commander (Contact Author)

London Business School ( email )

Sussex Place
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London, London NW1 4SA
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IZA Institute of Labor Economics

P.O. Box 7240
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Germany

Irina Dolinskaya

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
+1 202 623 7000 (Phone)
+1 202 623 4661 (Fax)

Christian Mumssen

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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