Developmental Institutions in the Russian Economy: Seeking for Schumpeterian Innovations or Political Rent?

Abstract

The article is devoted to revealing the role of developmental institutions for the innovative development of the Russian economy. It is noted that developmental institutions as organizational and economic structures are created in a certain institutional environment. The institutional environment predetermines a set of opportunities that make more profitable rent-seeking behaviour to find official privileges and benefits, but in other cases it is more profitable to realize productive activity leading to the extraction of innovative rent. The political and administrative market is a platform where the subjects of developmental institutions formation in the Russian economy interact. It is a hybrid of a classical political market as a way of making collective decisions on financing and producing public goods, and administrative market embedded in the structures of state authorities, which is the way to allocate resources through the use of status positions of specific groups of special interests within a formally unified power vertical. The result of the bargaining of interests in the Russian economy is not only developmental institutions that contribute to the generation of Schumpeterian innovations but also quasi-developmental institutions. Quasi-developmental institutions are developmental institutions with the formal function of transaction costs reducing for Schumpeterian innovators, but in fact used as a tool for allocating resources in the interest of political rent extraction. It is noted that the need for the Russian economy transition to the innovative path of development has been formed but the actors who are able to transform the need for innovation into demand are virtually absent, or they are not focused on a painstaking increment of the «economic pie» but on its active redistribution (rent-seeking).