But ... does Mr. Coase go to Russia?

​Introduction
After a short but lively period of economic and political debate (Malle, 1994), Russian authorities accepted a programme for mass privatization (Frydman, Rapaczynski and Earle, 1993; Bornstein, 1994), which, when implemented, contributed to a situation were most of the shares of most of the enterprises privatized which amounted to most of Russian industry exact figures differ ended up being owned by enterprise insiders, that is employees and managers. Workers often own up to more than half of shares. The rest is divided between company managers, outside investors and the state.

Insider dominance is clearly seen in numerous studies conducted. In the Blasi sample of December 1993 with 141 enterprises, 91 per cent of enterprises had majority employee share ownership (Blasi, 1994). Due to secondary trading, this share declined during 1994, but was still around 70 per cent in December 1994 (OECD, 1995).
Another sample of 301 companies in 26 Russian regions (Braverman, Klochkov and Lyukmanov, 1994) gives a very similar picture. In early 1994, employees had on the average 49.3 per cent of shares in these enterprises. Managers had 9.7 per cent, "small outside investors" 10.4 per cent and "large outside investors" 13.4 per cent. The remaining 17.2 per cent of shares remained state property. Even in this sample, thus, insiders owned on the average 59 per cent of shares. Majority insider ownership existed in 79 per cent of all firms sampled.



Reprint in PDF format 2002.
Uudelleenjulkaistu pdf-muodossa 2002.