Abstract
The paper analyzes the existing conditions of the urban economy and possible directions of its evolution in Russia; the focus is made on the phenomenon of the power economy. This phenomenon reflects the economic reality of the urban economic organization. The influence of the power economy on a local community and a city space development has both the positive and negative consequences. The major positive result is the increase of efficiency of urban economy through reorganization of city space. One of the negative results of predominant power economy was formation and development of the corruption model of urban economy. The analysis of the given model of urban economy allows determining not only formation and development factors but also consequences of its realization for the urban economy and local community including problems and threats to the urban economy development. The report considers the transformation of the corruption model of urban economy to the model of corporate capitalism. However, the given model also does not allow realizing the full potential of urban economy and improving considerably the quality and standard of living of local community. Formation of effective development of urban economy model now is possible only with the increase of social activity and social institutions modernization.
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Notes
- 1.
In the global rating data of the countries attractive for business activity provided by the World Bank, Russia is in the 112th position. According to field research of the World Bank, to open one’s own business in Russia it is necessary to get through 8 bureaucratic procedures; it takes about 18 days. http://russian.doingbusiness.org/data/exploreeconomies/russia.
- 2.
Economic analysis of power is produced by Social Economics, Institutionalism and Neoclassicism. The neoclassic approach defines economic power in quantitative terms, as a situation of inequality of the negotiation power of the participants of an exchange (Eggertsson T (2001) Economic behaviour and institutions. Delo, Moscow; Auzan A, Tambovtsev B (2005) Economic significance of civil society. Econ Issues 5:28–49). Institutionalism and Social Economics regard economic power in terms of interactions organization as the relationship, which determines any kind of interactions in an environment. For example, M. Weber defines power as ability of one individual (or group) to impose their will on another individual (group) despite the latter’s resistance (see: Weber M (1990) Selected works. pp 636–643). Y. Osipov follows the evolutionist approach connecting economic power with the ability to purposefully influence economic subjects and economic life (Osipov Y (1998) Theory of economy, vol 1. MSU PH, pp 365–366). N. Luman regards power as a universal social phenomenon, emerging from the need to organize the interactions of the subjects who are to choose one of the options; he believes that power is the communicative means regulating the choice. (see: Luman N (2001) Power. Praksis, p 22, 42, 151). K. Menar demonstrates considerable differentiation of authoritative relations and, along with already established types of authoritative relations – imposed, disconcerted and concerted – singles out “hybrid forms”, based on the basic element of concerted relations – coincidence of interests (Menar K (2005) Theory of organizations: variety of agreements in market economy development. In: Oleynik A (ed) Institutional economics. Infra-M, p 205). Thus, Social Economics and Institutionalism reveal the meaning of power in economy better than other approaches; they define it as specifically organized interaction of subjects and regard it as interactive relationship determining every interaction in economy.
- 3.
In Russia, most cities have authoritative organization of economy while in most developed countries mixed organization of economy prevails on the local level that presupposes flexible and natural interaction of all organizational aspects of economy: economic self-organization and power organization. This fact can be explained not only by the strengthening of bureaucratic authority which expresses group interests, but also by the weakness of the local community and municipal authority which expresses the community interests.
- 4.
The survey, in the form of questionnaire, was conducted among 107 small and medium enterprises. 89 % (95 persons) out of this number were individual entrepreneurs, 7 % (8 persons) – limited companies, 4 % (4 persons) – stock companies. The spheres of activity of the respondents: wholesale/retailing – 78.5 % (84), construction – 14 % (15), freight services – 2.8 % (3), catering – 3.7 % (4), car service – 1 % (1). The enterprises have been in operation for 1–3 years – 30 % (32); 4–6 years – 26 % (28); 7–10 years – 10 % (11); more than 10 years – 34 % (36). The number of employees: less than 10 people – 59 % (63); 11–30 people – 25 % (27); 31–50 people – 11 % (12); 51–100 people – 4 % (4 wholesale/retailing companies); more than 100 people – 1 % (1 diversified enterprise).
References
Auzan A, Tambovtsev B (2005) Economic significance of civil society. Moscow: PH INFRA-M, Econ Issues 5:29
Kuzminov J, Radayev V, Yakovlev A, Yasin E (2005) Institutions: from borrowing to growing (Experience of Russia’s reforms and opportunity to cultivate institutional changes). Moscow: SU-HSE PH, 1005. p 8
Luman N (2001) Power. Moscow: Publishing Group Praksis, p 19
Menar K (2005) Theory of organizations: variety of agreements in market economy development. In: Oleynik A (ed) Institutional economics. Moscow: PH INFRA-M, p 205
The World Development Report (1997) The state in the changing world. Moscow. Agency of EC. INF-AI Prime-TASS, IBRD/World Bank 1997. p 1
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Ogurtsova, E. (2014). The Development of the Local Economic System in the Conditions of Predominant Power Economy. In: Banerjee, S., Erçetin, Ş. (eds) Chaos, Complexity and Leadership 2012. Springer Proceedings in Complexity. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-7362-2_41
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