| What is the nature of the transition from socialism to capitalism and economic change in general? To explore these and related questions, the author examines the market transition in Russia. Data were collected in St. Petersburg, through observation of two private firms; open-ended interviews with managers, entrepreneurs, and experts; and secondary sources (factory newspapers, business press, economists' works). Data suggest that the transition is three simultaneous interacting processes, each examined for exchange, value, and production. Institution-building involves (re)creating governance structures, networks, and rules/roles furnishing an economic framework and sense of order. Initial shocks were a window of opportunity; actors responded with existing tools and structures. After further delegitimating shocks, actors turned to new forms for restructuring environments. Authority-building is creating a "social policeman" and defining legitimate rights and limits of domination. When the state-backed formal means weakened, actors used informal means for enforcement. Laws on enterprise restructuring gave employees voice and led to disputes and conflict within the firm between workers and managers over new structures and bases of command. Culture-building involves the coexistence of newer models and strategies with surviving Soviet-era models and strategies, often leading to contradiction and decoupling (adopting new strategies without the tacit knowledge and practice to make them work), or legislating new strategies while unable to implement them. All processes interact and influence each other: culture provides models and legitimacy for new organization and authority, and institutions influence cultural models. Key to economic change is the power-culture link: a selection mechanism, performance rules and criteria, and enforcement mechanisms to weed out actors whose strategies "fit" badly with new rules. The confusion of the Russian transition is that this selection mechanism--the heart of institutionalization--is problematic, as selection rules and criteria remain vague and enforcement mechanisms underdefined and underused. |
