Russian artel revisited through the lens of the New Institutional Economics

Abstract

Artels, a kind of semi-formal associations for co-operative labor, were widely spread in Russia right up to the early twentieth century. The most popular explanation of this phenomenon is specific Russian mentality, the so-called "artelnost", i.e. the internal commitment to collective work. The paper checks this statement and reveals that artels, as an organizational form of production in specific spheres which is characterized by the team use of inputs, existed mainly due to rather effective solving of adverse selection and moral hazard problems.