Corporate Governance in Russia, edited by D. J. McCarthy, S. M. Puffer, and S. V. Shekshnia. Cheltenham, U.K.: Edward Elgar. 2004. Cloth, ISBN 1843762056, $125. 421 pages.
The transition from "administrative-command," or Soviet-style, socialist economies to the current Russian and East European variant of pecuniary emulation is perhaps the most important, and certainly the most spectacular, wholesale economic transformation attempted in recent times. In terms of its rate of occurrence, it even surpasses the transition to Soviet-style planning after 1917, which did not really commence until the end of the 1920s. As a consequence, numerous books have appeared analyzing the consequences of the collapse of Soviet power for the Russian economy, and Corporate Governance in Russia focuses on this topic from the point of view of the attempt to establish some type of corporate responsibility in the Russian variety of capitalism.
The book is divided into four main sections which examine the political, economic, and cultural context of corporate governance, its attempted implementation in large-scale enterprises, some case studies of Russian companies, and finally the possible role that corporate governance might play in the future. Overall the book can certainly be recommended as a detailed and often insightful account of the subject under review, which takes care to situate the attempted transition in the cultural and institutional context of post-Soviet decline, although various problems with the framework(s) adopted can be articulated as will be demonstrated in what follows.
The opening chapter defines corporate governance as "the exercise of power over and responsibility for corporate entities" (p. 3), for example, assessing risk, evaluating capital allocations, and monitoring the management of capital. One particular articulated goal is to protect shareholder interests, having recognized a conflict between shareholders and managers, but in fact the scope of the book is (thankfully) much wider than this type of goal suggests. Of particular interest to evolutionary economists is the attempt to highlight institutional variation when applying existing models of corporate governance to the context under review. The relevance of Russian cultural traditions such as low trust levels, high uncertainty avoidance, the acceptance of relatively high power distance, and reliance on personal networks are discussed in detail in chapter 2, and the problems of...