Crib sheet for the discipline: “Institutional Economics. How the “QWERTY Effect” Affects Our Verbal Preferences Applying Institutional Trap Theory to Macroeconomic Policy Analysis

QWERTY effects in modern scientific literature mean all types
relatively ineffective but enduring standards that demonstrate that "history matters".

These effects can be detected in two ways:

- or to compare actually coexisting in modern world technical standards, or to compare implemented technical innovations with potential ones that have not been implemented.

Standards that coexist.

Although the modern economy has long been globalized and unified, different countries of the world continue to maintain different technical standards that are incompatible with each other. Some examples are well known. Apart from known history with keyboards typewriters, from which, in fact, the term QWERTY effects came from, one can cite, for example, the differences between left-hand (in the former British Empire) and right-hand traffic on the roads of different countries. This forces some automakers to put the steering wheel on the cars on the left, and others on the right. Other examples are less well-known, such as differences in rail gauge or transmission standards.

Perhaps QWERTY effects appeared only relatively early in economic history? No, they manifest themselves in the era of scientific and technological revolution. Examples often cited are the formation of television equipment standards (the 550-line standard in the US compared to the best 800-line standard in Europe), video cassettes and CDs (the victory of the VHS standard over BETA), the development of the software market (the victory of DOS / WINDOWS over Macintosh ), etc.

At the symposium at the HSE, D. Kotyubenko spoke about how technological QWERTY-effects hinder the development of electronic money settlement systems. It turns out that the previously introduced debit plastic cards and the old system of check settlements prevent the introduction of more advanced "electronic money" (chip cards) in developed countries. As a result, experts predict higher rates of transition to "electronic money" either by countries that are somewhat lagging behind in their development (like, say, Russia), or by countries with very strong state regulation (like, for example, Singapore).

Standards that could coexist.

Compared to the study of the competition of different standards, somewhat more speculative, but also more promising, is the analysis of "failed economic history." The point is that, according to many historians-economists, some technical innovations that won due to market circumstances blocked other, potentially more effective ways of development. The idea of comparing the effectiveness of actually implemented and potentially possible technological strategies was first expressed in the notorious book of the American economic historian P. Vogeli, published in 1964, "Railways and America's Economic Growth" .

It was traditionally believed that it was railroad construction that was one of the "locomotives" of America's rapid economic growth in the 19th century. Vogel tried to test the usual assessments of the transport revolution in the language of numbers. He built a counterfeit model - how the United States would develop if instead of "iron horses" its expanses continued to surf stagecoaches and steamships. The results of mathematical calculations turned out to be quite paradoxical: the contribution of railway construction turned out to be extremely small, equal to the national product in just a few months (in 1890, the US GNI would have been lower by about 4-5%).

A noisy discussion immediately flared up around Vogel's book. Critics rightly pointed out that the accuracy of his calculations is very arbitrary, since it is difficult to reliably measure what was not. Most importantly, Vogel's model abstracted away some of the important qualitative changes initiated by construction. railways, in particular, because the acceleration of transportation made possible the production of new goods that otherwise would not have been produced.

David and other "QWERTY economists", while not attempting to quantify
alternative technological strategies, but widely use a qualitative comparison of the real with the potential. Moreover, if Vogel admitted that in real history the most effective variant still won, then David's followers admit the possibility of winning just the inefficient variant.

One example of this kind is the history of nuclear energy. The modern "peaceful atom" is, in essence, a by-product of " cold war"because the first nuclear power plants 1950-1960s were intended primarily to show the possibility of peaceful use of technologies originally intended for military purposes. This contributed to the adoption of light water reactors as a standard, but it is believed that alternative designs for civilian nuclear reactors(for example, a gas-cooled reactor), not genetically related to military technology, could be more effective.

So, after numerous studies of QWERTY-effects, historians-economists have discovered with amazement that many of the symbols of technological progress around us have acquired a look that is well known to us as a result of, in general, largely random circumstances. This amazement is due to the fact that the theory of choice existing in economics is built mainly on the model of establishing an equilibrium market price, which occurs, as S. Tsirel pointed out, by trial and error in the process of a very large (in the limit - infinite) number of transactions. The number of acts of establishing a new standard is obviously limited: usually, several attempts are made to establish relatively inefficient standards, and then a certain sufficiently effective standard is established, which subsequently either is not adjusted at all, or is adjusted a small number of times. Therefore, achieving the optimal standard is not the rule, but the exception [Tsirel, 2005]. Thus, a new approach to economic history helps to realize that the market mechanism does not optimize everything in the world.

R.M. NUREEV, Yu.V. LATOV
What is path dependence and how Russian economists study it.

According to Arthur and David, the situation in technological development is characterized by dependence on the trajectory of the previous development if:

The choice of actually observed mass technology was not predictable;

This choice is almost impossible to change due to the magnitude of the costs that need to be implemented in a coordinated and simultaneous way (or within a short time);

A mass-produced technology is highly likely to be ineffective.

The emergence of such situations, in turn, is the result of the functioning of two mechanisms: a) increasing returns to scale; b) the impact of small random events.

Increasing returns are also a consequence of the interconnectedness of technology and improving skills in working with it as part of human capital, resulting from the learning process during the application of technology ( learning by using), as well as network externalities and non-movability of investments.

As an example, in particular, the QWERTY keyboard layout of typewriters, and then computers (QWERTY are the first six letters of the Latin keyboard layout). This arrangement arose because it avoided the clutching of levers when typing the most frequently repeated sequences of letters on mechanical typewriters. Subsequently, this drawback - the clutch of levers - was overcome, however, the keyboard qwerty already conquered the world. Typewriters with alternative, often more ergonomic layouts, were not in demand, including because most typists had typing skills on the keyboard qwerty, retraining them would be prohibitively expensive.

The mechanism of small random events, i.e. such events that could not be foreseen in advance by an outside observer with limited knowledge, is “responsible” for which of the available technologies is actually chosen, winning

1 David P. Clio and the Economics of QWERTY // American Economic Review.

1985 No. 75. P. 332-337.

Arthur B. W. Competing Technologies, Increasing Returns and Lock-in by Historical Events//Economic Journal. 1989 No. 99. P. 116-131.

in competition with functionally similar technologies. "Thanks" to him, such a victory is usually not associated with greater efficiency.

Subsequently, with the help of the concept of dependence on the trajectory of the previous development, they also began to analyze institutional changes. Institutional inertia is the reason that at a given moment in the institutional structure of the economy, some of the known institutional innovations - in principle more effective than those actually used - nevertheless, are not applied in practice.

At the heart of the phenomenon of institutional inertia lies, first of all, the limited rationality of economic agents who have chosen and began to massively master not the best institution, and, in addition, purely economic factors that make it inexpedient to change the institution because of the threat of significant costs.

An alternative view of institutional inertia is associated with the Schumpeterian and neo-Schumpeterian tradition of analyzing technological change. In accordance with it, technological changes are carried out within certain clusters, which are a limited range of technology options that can be formed from initial knowledge.

The described interpretations of the dependence on the trajectory of the previous development in the field of technological changes, when applied to the field of institutional changes, lead to significantly different assessments of the possibility of significant or abrupt changes in the institutional structure of economies. V dependent on institutional inertia.

According With the first of the interpretations, there are no restrictions on the content of the idea of a new institution (or system of institutions), except for restrictions on the creative abilities of individuals striving to form an institutional environment that best suits their interests. The idea of institutional change can also be borrowed or purposefully created, i.e. be designed. However, only that institutional change will enter mass practice, the benefits of which will exceed the costs of switching to following the new rule.

According to the second interpretation of institutional inertia, within the framework of the established institutional environment, ideas of institutional innovations that are not a recombination of the components of the rules that make up this environment cannot arise. Purposeful design of a new rule turns out to be, with this approach, fundamentally limited by the scope of diversity formed by the complete

enumeration of all possible combinations of the mentioned components. At the same time, a borrowed idea that does not fit into this framework is rejected not because of inefficiency (it does not matter - social inefficiency or inefficiency for special interest groups restructuring the institutional environment), but because of inconsistency with existing rules.

The experience of both technological and institutional change strongly argues in favor of the greater correctness of the interpretation of institutional inertia given in the works of Arthur and David and their followers. In other words, freely emerging ideas of innovation pass through a filter of selection according to the criterion of efficiency, which determines which of them (taking into account the effect of increasing returns and the randomness of the initial choice) will receive mass distribution. Historical heritage (whether physical or institutional) manifests itself within this concept not in a restriction on ideas, but in a specific structure of benefits and costs inherent in principle similar innovations competing for distribution in non-coinciding economic systems.

Note that the heuristic value of the concept of institutional inertia lies not in the possibility of a “universal” explanation of any difficulties that arise along the path of institutional transformation, but in drawing attention to the specific beneficiaries of the old rules, who, thanks to the latter, have economic and political opportunities that allow them to block potentially more effective innovations. .

The concept of the blocking effect was used by Douglas North to explain situations that are often encountered in practice, in which an institutional change that can significantly improve the conditions for the production of value, despite this, is not implemented in practice.

12. The role of Path Dependence, QWERTY-effects in public administration: problem or opportunity.

"Path dependence" (dependence on previous development) is a concept that initiates the placement of new ontological accents in social sciences. Its formation takes place at a time when social transformations have reached an unprecedented uncertainty in terms of reflecting the dynamics of these changes in the social sciences. In this regard, any social problem that has the last basis of the problem of social time, during the transitional period, reveals itself from the point of view of the historicity of man and society. For Russia, with its "unpredictable", sometimes deliberately falsified past, path dependence is endowed with significant semantic and explicative potential, opening up new possibilities for integrating social memory into a single integrity. A comparative analysis of the conceptualization of path dependence in the domestic and Western traditions reveals the specific features of the opposition of time inherent in different cultures.

In its most general form, it comes down to asserting the "meaning" of the past for the present and future, and it sounds trivial. The problem is to give it analytical efficiency. Here, it may be useful to turn to the concept of “pathdependence”, which is actively discussed in the framework of modern economic theory, i.e. depending on previous development.

It is far from speculative "historicism", as it is built to explain a very specific phenomenon - cases of victory of such technical standards that are not the best, most efficient and economical. This phenomenon cannot be explained within the framework of neoclassical economic theory, according to which competitive market mechanisms should lead to the selection of the most effective technical solutions. The answer of the pathdependence theory is that the initial choice is made in conditions of non-obvious advantages of one or another option and can be determined by random or "non-economic" factors. And then mechanisms begin to work - technical interdependence, increasing returns to scale, durability of capital equipment - that make it preferable (more profitable) for economic agents to use the established standard, rather than trying to introduce another, albeit technically more advanced. Choices made in the past under certain conditions predetermine choices made today when those conditions no longer exist. This is the dependence on the previous development.

The generalization of the pathdependence concept is connected with its development within the framework of neo-institutional economic theory, first when explaining why some countries demonstrate successful economic development for a long time, while others lag behind just as steadily. The answer was found in the differences in institutions that once established themselves in countries that had approximately the same starting opportunities for economic growth. Further analysis showed that in the history of institutions there are also pathdependence mechanisms - the effect of coordination, network effects, the durability of social capital. Forward-development dependency in the institutional realm is like pathdependence in technology—both based on the value of endorsing a common practice (in technique or in rules) that proves costly to change.

The problem of "institutional traps" has attracted close attention of economists and scientists studying economic processes in countries with economies in transition in the last ten years.

In the English-language literature, the “institutional trap” is most often used not as an “institutional trap”, but as a lock-in effect: according to North, this means that once a decision is made it is difficult to reverse (2). In terms of neo-institutional theory, "an institutional trap is an inefficient stable norm (an inefficient institution) that has a self-sustaining character" (3). Its stability means that if an inefficient norm prevailed in the system, then after a strong perturbation the system can fall into the "institutional trap", and then it will remain in it even when the external influence is removed.

As D. North notes, "an increment of changes in the technological field, once taken in a certain direction, can lead to the victory of one technological solution over others, even when the first technological direction, in the end, turns out to be less effective compared to the rejected alternative" (3 ).

A textbook example of such inefficient technological development was the problem of the QWERTY effect, described in the work of P. David (1) and further developed in the works of V.M. Polterovich (3) in relation to institutions and defined as an institutional trap.

Moreover, in this case, discussions about the degree of effectiveness or inefficiency of the applied technology are relegated to the background, since scientific interest represents the very possibility of the existence of QWERTY-effects, named by analogy with the above example, and the search for a solution to the problems associated with them.

From the point of view of the theory of transaction costs, the appearance of the QWERTY effect is explained by at least two reasons:

1. Mismatch of a number of interests of various groups of economic agents. The appearance of the QWERTY effect is the result of a partial disagreement between the interests of producers and consumers. The goal of manufacturers is to sell faster and more, to achieve this, the real arrangement of letters on the keyboard was adopted. The goal of consumers is 1) to improve the quality of paperwork (printed is more presentable and readable than written by hand) and 2) appeared a little later - to increase the speed of typing. Given the different compatibility of goals (neutrality, compatibility, incompatibility and the degree of effect from their interaction - neutral, increasing and decreasing), the goals of producers (sell more) and consumers (improve the quality of paperwork) can be considered compatible. However, subsequently, the combination of the number of sales and speeding up printing by changing the arrangement of letters on the keyboard are clearly incompatible goals. In this case, the result of whether we fall into the trap or not depends on the effect obtained from the imposition of goals. If buyers didn't have the first target, perhaps this would encourage manufacturers to look for faster lettering. However, the dual goals of consumers stimulated the initial demand and expansion of the production of QWERTY-efficient products, subsequently, economies of scale played a role.

Based on the foregoing, it follows that the QWERTY effect is one of the products and at the same time a fiasco of the supply-side economy, when the interests of producers prevail over the tastes and preferences of consumers.

Thus, a trap was formed, the exit from which was associated with high costs (retraining of typists already working on typewriters, the cost of resistance and the cost of retraining, reprofiling production for the production of typewriters with a new keyboard, as well as the costs of changing the opinion of consumers about the lack of efficiency of this product ).

2. Mismatch of short-term and long-term interests. In this case, such a discrepancy is associated with the concept of "efficiency" and is largely determined by the incompleteness of information. Since economic agents have incomplete information, in particular about the future level of technology development, and sometimes due to the limited information in other areas of society (due to the physical and mental abilities of a person), it is wrong to talk about the effectiveness of certain technologies, methods of organization, we can talk only about comparative efficiency at the present stage of development.

Based on these two reasons, it is possible to explain the existence of a number of incompatible with each other, relatively inefficient standards: electricity transmission, different railway gauges, multidirectional traffic on roads, etc.

9. The role of the bureaucracy in the modernization processes. Is bureaucracy a "monster" or a "rational machine"?

Bureaucracy- this is a social layer of professional managers included in the organizational structure, characterized by a clear hierarchy, "vertical" information flows, formalized methods of decision-making, a claim to a special status in society.

Bureaucracy is also understood as a closed layer senior officials opposing itself to society, occupying a privileged position in it, specializing in management, monopolizing power functions in society in order to realize its corporate interests.

The term "bureaucracy" is used not only to refer to a certain social group, but also to a system of organizations created by public authorities in order to maximize their functions, as well as institutions and departments included in the branched structure of executive power.

The object of analysis in the study of bureaucracy are:

contradictions that arise in the implementation of management functions;

management as a labor process;

interests social groups involved in bureaucratic relations.

Weber's theory of bureaucracy

The emergence of the term "bureaucracy" is associated with the name of the French economist Vincent de Gournay, who introduced it in 1745 to denote the executive branch. This term entered the scientific circulation thanks to the German sociologist, economist, historian Max Weber (1864-1920), the author of the most complete and comprehensive sociological study of the phenomenon of bureaucracy.

Weber proposed the following principles for the bureaucratic concept of organizational structure:

hierarchical structure of the organization;

a hierarchy of orders built on legal authority;

subordination of a lower-level employee to a higher one and responsibility not only for their own actions, but also for the actions of subordinates;

specialization and division of labor by function;

a clear system of procedures and rules that ensures the uniformity of the implementation of production processes;

a system of promotion and tenure based on skills and experience and measured by standards;

orientation of the communication system, both in the organization and outside, to the written rules.

The term "bureaucracy" was used by Weber to denote a rational organization, the prescriptions and rules of which create the foundation effective work and allow to fight against favoritism. Bureaucracy was considered by him as a kind of ideal image, the most effective tool for managing social structures and individual structural units.

According to Weber, the strictly formalized nature of bureaucratic relations, the clarity of the distribution of role functions, the personal interest of bureaucrats in achieving the goals of the organization lead to the adoption of timely and qualified decisions based on carefully selected and verified information.

Bureaucracy as a rational management machine is characterized by:

strict responsibility for each area of work:

coordination in the name of achieving organizational goals;

optimal action of impersonal rules;

clear hierarchical relationship.

For the transitional period (from the aggregate of officials to the bureaucracy), these measures should be combined with the creation of motivation for officials in the implementation of the modernization project. The set of mechanisms is classic - high wages and a social package for those officials on whom the promotion of certain blocks of the modernization project depends.

However, an inevitable question arises here: what, in fact, is meant by a modernization project in modern Russia? What kind of bureaucracy Russian society will need will ultimately depend on the essential characteristics of this project.

Modernization project and perspectives of bureaucracy

A modernization project, regardless of its content, is a special case of an innovative project, i.e. a project of "targeted change or creation of a new technical or socio-economic system." The modernization project is characterized by the highest level of scientific and technical significance, surpassing in this indicator such types of projects as innovative, advanced and pioneer innovative

In modern Russia, the concept of "modernization project" has become quite widely used by experts since the beginning of the 21st century: back in 2001, at the International Foundation for Socio-Economic and Political Science Research (Gorbachev-Fond), a research group led by Doctor of Philosophy V. Tolstykh developed "Modernization project for Russia". In our opinion, its authors were relatively free from ideological "spells", and therefore they managed to make a number of intellectual breakthroughs. Of course, there was an ideology in the project (the following quote is appropriate in this case: "An important place in the formation of the Russian modernization project is occupied by the social democratic position regarding the dichotomy of "capitalism-socialism" [Modernization Challenge ... 2001], but its authors believed that the main thing is the modernization processes in the country, and not the formation of an ideological superstructure over them.

10. Basic provisions of the New State Administration.

Fundamentals of public administration

Public administration- this is the process of regulating relations within the state through the distribution of spheres of influence between the main territorial levels and branches of government. Public administration is based on the state interest aimed at protecting the integrity of the state, its key institutions, supporting the level and quality of life of its citizens. Among the priority areas in the implementation of the public (state) interest is the need to perform several functions: protective (defense), social, legal, economic, political and arbitration.

State power extends to objects located both on the territory of the state itself and outside it.

Main signs government authorities are:

o integrity;

o indivisibility;

o sovereignty.

Public administration implements the following functions.

1. Institutional - through the approval of the socio-economic, political, civil institutions necessary for solving state issues for the distribution of power.

2. Regulatory - through a system of norms and laws that establish general rules governing the behavior of subjects.

3. Goal-setting - through the development and selection of priority areas for the socio-economic and political development of the country; implementation of programs supported by the majority of the population.

4. Functional - through the development and implementation of actions aimed at supporting the entire economic infrastructure of the state in the face of its leading industries.

5. Ideological - through the formation of a national idea, designed to consolidate society within the boundaries of the state.

Main principles formation of the public administration system are as follows:

o separation of powers;

o complementarity;

o subsidiarity;

o sovereignty;

o democracy;

about homogeneity.

Principle separation of powers involves the division of the sole state power into three spheres: executive; legislative; judicial. This should serve as a condition for effective control over the activities of the state apparatus.

Principle complementarity characterized by a focus on continuity in the power structure. It assumes a uniform distribution of power functions in the context of the entire vertical of control at all territorial levels.

Principle subsidiarity implies a procedure for the distribution (and redistribution) of powers between the administrative levels of state power, i.e. the sequence of execution of power by administrative bodies and the procedure for distributing the responsibility of these bodies to the population. Transfer of authority to more high level management in accordance with this principle can be carried out only if it is impossible to execute them at the lowest level. The principle of subsidiarity has two dimensions: vertical and horizontal.

Vertical includes the distribution of power between levels of government in the direction from local to state.

The horizontal dimension covers the procedure for the distribution of powers between the branches of government at the federal, regional and local levels.

In accordance with the principle of subsidiarity, power should be distributed among power structures, mainly in connection with a reduction in the distance between the population and the authorities representing it.

Principle sovereignty presupposes the existence of actual independence as an essential feature of the state. State sovereignty means "the supremacy and independence of power subject to law, the monopoly of coercion within the limits of state powers, and the independence of the state within the framework of the international order." Being an attributive feature of the state, sovereignty implies a set of special institutions that ensure the status of an independent subject of international relations.

Principle democracy directs the population to the need for active participation: in decision-making of state and municipal significance; election of state and municipal authorities; development of territorial development programs based on mastering the mechanisms of public involvement in the current affairs of the region or municipality; allocation of zones of authority for public associations organized in the territories.

Principle homogeneity defines the advantages of federal law over regional law.

The essence of the principle of homogeneity is manifested in accordance with the subordination of regional legislation to federal legislation, which ensures the unity of the state and the universal subordination of all institutions of power to the Basic Law (Constitution of the Russian Federation).

In English literature, the "institutional trap" is used most often not as an "institutional trap", but as a lock-in effect: according to North, this means that one day decision hard to undo (2). In terms of neo-institutional theory, "an institutional trap is an inefficient stable norm (an inefficient institution) that has a self-sustaining character" (3). Its stability means that if an inefficient norm prevailed in the system, then after a strong perturbation the system can fall into the "institutional trap", and then it will remain in it even when the external influence is removed.

A textbook example of such an inefficient technological development was the problem of the QWERTY-effect, described in the work of P. David (1) and further developed in the works of V.M. Polterovich (3) in relation to institutions and defined as an institutional trap.

Moreover, in this case, discussions about the degree of efficiency or inefficiency of the applied technology are relegated to the background, since the very possibility of the existence of QWERTY effects, named by analogy with the above example, and the search for solutions to the problems associated with them are of scientific interest.

In terms of theory transaction costs The appearance of the QWERTY effect is due to at least two reasons:

Thus, as in the case of QWERTY effects, one of the main reasons for the appearance of institutional traps is the discrepancy between the short-term and long-term interests of economic agents and the combination of behavior patterns formed on the basis of these interests with economic efficiency.

Getting out of the institutional trap

The critical moment (the bifurcation point of history) occurs when the transaction costs of operating an inefficient norm exceed the transformation costs of abolishing the old norm and/or introducing a new norm:

As an example, consider the introduction of new forms of organization of labor or production, within the institutional terminology of institutions: the shop floor system, trusts, syndicates, marketing, etc.

Both the costs of adapting the new institution and the socio-economic consequences of the continuation of the functioning of the old inefficient norm should be considered as determining values.

2) Revolutionary, in which the liquidation and replacement of an ineffective norm occurs by force, as a result of reforms that involve changing the cultural values of society and carried out, in particular, by the state, or on its behalf by certain interest groups. If such changes are associated with the redistribution of property and affect the interests of most social groups, then the reforms are rather slow, encountering resistance from those strata whose interests are infringed, which inevitably leads to a sharp increase in the costs of transformation. In this case, success depends on the balance of funds and the willingness to "go to the end" of various interest groups:

The costs of getting out of the institutional trap can be classified as follows:

the costs of establishing a new norm;
costs of overcoming cultural inertia (unwillingness to change old stereotypes);
the costs associated with the destruction of the lobbying mechanism of the old norm;
costs of adapting the new norm to the existing institutional environment;
the costs of creating accompanying norms, without which the functioning of the new norm will be inefficient, etc.

investment trap

In the development of the proposed approach to the analysis of institutional traps, in the author's opinion, it is interesting to consider the investment trap, which is directly related to the change in the behavioral model from long-term to short-term.

In the transition economy in the first half of the 1990s. the benefit of economic agents from short-term operations, mainly the sale and purchase of imported goods, far exceeded the benefits from investments in production, which in most cases did not pay off, because in the process of multiple redistribution of property the last word remained not with the one who managed production more efficiently or invested any funds in it, but with the one who was “at the right time in the right place”. After several unsuccessful attempts at long-term investment, conscientious economic agents were forced to change their behavior and reorient their activities towards short-term, but highly profitable transactions. There is a global trap in the transition economy: the prevalence of short-term investments over long-term ones. Moreover, the state itself in its economic policy was guided by the solution of short-term problems, for example, covering the state budget deficit (for this, obtaining a foreign loan “by all means”, selling enterprises of strategic importance for the country, signing agreements that are not always economically beneficial for the country etc.).

The formation of the investment trap occurred in less than short term than the way out. This is explained by the fact that it takes longer for economic agents to understand the benefits of long-term investments than for the reverse behavior to take root, and there is a significant time lag between decision-making and the benefits received by innovators and conservatives, who make decisions on long-term investments only after innovators will receive not a one-time, but a constant profit.

The way out of the institutional trap is very long and rather difficult (the bifurcation point is a new economic crisis). An evolutionary path is possible, but only with the help of the state. Until it itself changes its policy from a short-term model to a long-term one and starts investing in its capital (to a greater extent in human capital, since investments in production can also be made by the private sector), thus showing the seriousness of their intentions, economic agents will feel uncertain and will not make long-term investments, that is, change their behavioral model from short-term to long-term. Only when resident economic agents begin to benefit from following the long-term model can long-term foreign investment be expected.

Applying Institutional Trap Theory to Macroeconomic Policy Analysis

The theory of institutional traps opens up wide opportunities for scientists to apply a fundamentally new approach to analysis in various fields activities, and in particular, to assess both the state of the economic system and the ongoing macroeconomic policy. If we look at the Russian economy through the prism of the theory of institutional traps, then the conclusion suggests itself: it has become a “hostage” of the system of institutional traps, which was largely the result of macroeconomic policy.

One of the global pitfalls of our macroeconomic policy is the dependence on the trajectory of the previous development that took shape in the first half of the 1990s, namely, on adherence to the recommendations of the neoclassical school, under the influence of which the reform policy was formed and implemented. Although in the second half of the 1990s general “enlightenment” has come (see, for example, articles by J. Stiglitz, J. Kornai on the need for institutional reforms in the journals “Voprosy ekonomiki”) macroeconomic policy is still being built according to the neoclassical scenario: the hypnotic effect of the “infallibility” of individual neoclassical models that do not work and cannot work for institutional reasons in the Russian economy, we still feel today:

It is primarily about the denial of the role social policy and its impact on political stability and economic development(see the main reforms - monetization of benefits, reform of education, health care), although the instability of the institutional matrix is mathematically calculated in case of insufficient development of one of the spheres of society - social, political or economic (8). Within the framework of the institutional theory, the social sphere is in many respects decisive in the formation of the "rules of the game" in other areas.
Copying individual measures of macroeconomic policy, unfortunately, does not lead to the same results in the Russian economy as in countries with developed market economies. We should get used to the fact that the sensitivity coefficient of our economy is many times less than macroeconomic policy, much less than in other countries. When analyzing the monetary policy of the Central Bank, in particular, leading to a change in the money supply, we forget that our multiplier is two, and not eight or twelve for individual aggregates, as in the United States, and therefore all activities aimed at changing the money supply should be carried out in larger volume. When the Central Bank talks about adjusting the dollar exchange rate by 1-3%, it is obvious that this measure will lead to nothing because of the dollar overhang, and if the dollar exchange rate is liberalized, it will cost a maximum of 20 rubles.
Another trap is that processes that are effective from the point of view of the development of a “normal” economy are negative impact on the state of the modern Russian system. Paradoxical as it may seem, for example, such a deal as the early offset of the Russian debt by Turkey by our helicopters and planes, a deal that, all other things being equal, effectively affects the growth of output, unemployment, in the conditions of an excess dollar supply, leads to inflation. The activities of guest workers in Russia can be viewed with the opposite effect, since they are a channel for the leakage of the dollar supply and help reduce inflation.
Another confirmation that the Russian economy is a continuous chain of institutional traps is that the government itself is in a trap: the simultaneous achievement of incompatible goals, for example, curbing inflation and lobbying the interests of large corporations to maintain high rate dollar.

The exit or a new bifurcation point could be a financial crisis caused by an “adjustment” of the artificially restrained dollar exchange rate. Such a policy cannot continue for a long time, since the consequences are getting worse: the government is getting used to an artificially growing stabilization fund, the Central Bank is getting used to the growth of gold and foreign exchange reserves, and so on. You get used to good things easily, but we already know what the prevalence of short-term interests over long-term ones leads to.

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Polterovich V.M. Institutional traps and economic reforms. – M.: Russian economic school, 1998.
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E.A. Brendeleva
Proceedings of the Internet conference 20 years of research on QWERTY effects and dependence on previous development (from 15.04.05 to 05.06.05)

The problem of "institutional traps" has attracted close attention of economists and scientists studying economic processes in countries with economies in transition in the last ten years.

In English literature, the “institutional trap” is most often used not as an “institutional trap”, but as a lock-in effect: according to North, this means that once a decision is made it is difficult to reverse (2). In terms of neo-institutional theory, "an institutional trap is an inefficient stable norm (an inefficient institution) that has a self-sustaining character" (3). Its stability means that if an inefficient norm prevailed in the system, then after a strong perturbation the system can fall into the "institutional trap", and then it will remain in it even when the external influence is removed.

From the point of view of the theory of transaction costs, the appearance of the QWERTY effect is explained by at least two reasons:

Causes of institutional traps

"Institutional traps" have accompanied and continue to accompany Russia's transitional economy in various areas: property relations, the monetary system, the structure of the real sector of the economy, and so on. Institutional traps include barter, non-payment, corruption, tax avoidance, and so on. According to economists, see, for example, the works of V.M. Polterovich, A.K. Lyasko, O.S. Sukharev, these traps are, as a rule, the result of a sharp change in macroeconomic conditions.

One of the most serious consequences of "institutional traps" is that, although they mitigate the negative short-term consequences of unprepared, too rapid changes, at the same time they hinder long-term economic growth.

During the existence of the Soviet model of development, a behavioral model has been formed in society, focused on achieving long-term interests and based on long-term planning, as in economic activity, as well as in Everyday life. The formation of this model was directly influenced by the main trends in the development of society. The life of the members of the society was practically scheduled "on the shelves" for many years to come: a nursery - kindergarten- school - summer pioneer camp - institute - summer "potato", construction team - guaranteed job distribution - guaranteed pension.

In a transitional economy, the system of basic values of society is changing: there is a reorientation from a long-term model of behavior to a short-term one. This is due to the fact that in conditions of uncertainty and instability, following the long-term model brings only losses, and profitable short-term intermediary transactions convince economic agents to abandon the model based on long-term interests. The destruction of the latter was facilitated by numerous unsuccessful attempts by citizens to save their depreciating savings in numerous financial pyramids, suspicious banks, and dubious scams. The destruction of a long-term model of behavior occurred simultaneously with the destruction of the institution of trust in the state, the system of law, partners, and, finally, neighbors, friends, and relatives.

As a result, a model focused on achieving short-term interests has taken root in society. Life "today" has become the norm, and the processes of returning to the previous model are associated with high costs, if they are irreversible, since in the market society on the American model, which was taken as a basis by our reformers, it is the short-term model that prevails. It should be noted that in the new generation this short-term model of behavior is laid down as a basic one.

Thus, we fell into a global institutional trap associated with a mismatch between effective development and a short-term model of behavior.

Getting out of the institutional trap

The transition to the initial state or exit from the institutional trap is associated with very high transformation costs, which hinders any serious transformations, thereby predetermining the long-term existence of an inefficient norm, in addition, exit from the institutional trap can be held back by such forces as the state, influential interest groups etc.

Within the framework of the theory of institutional change and the theory of transaction costs, at least two possible ways out of the institutional trap can be considered:

1) Evolutionary, in which the exit conditions are formed by the economic system itself, for example, the destruction of an institutional trap can be facilitated by the acceleration of economic growth, a systemic crisis, etc.

Getting out of the institutional trap

investment trap

Applying Institutional Trap Theory to Macroeconomic Policy Analysis

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