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Top 16 Most Interesting Reports Presented at the HSE's XVI April International Academic Conference

Social policy challenges and losses; Russians are not Europeans; Why parents in Moscow hate the USE; Defence attorneys' strategies in dealing with law enforcement agencies; Migrants in Moscow: myths and reality; Why switching to 'effective contracts' for school teachers does not work—these were among the most interesting papers from the HSE's XV April Conference, according to Opec.ru.

A total of 715 papers were presented at the HSE's XVI April Conference that ended today in Moscow. The following 16 are a must read for those interested in economic policy; a few of them will also be interesting to those whose fields lie in the humanities. Preference was given to papers with the full text, as well as the abstract, posted on the conference website.

'Interesting' is obviously a subjective notion; no two lists of the most interesting academic papers are exactly alike. We have selected those papers which may be relevant, engaging and helpful for researchers of related fields, policymakers in the socio-economic sphere, and a wide audience of people interested in economic and social issues.

1. Vladimir Magun, Maksim Rudnev (HSE, RAS Institute of Sociology)
The European Typology of Values and the Basic Values of Russians

Most Europeans either value altruism over self-assertion and expect guidance and protection in return for serving others, or value personal achievement above all and rely only on themselves.

Northern and western Europeans are more likely than people from the Mediterranean and post-socialist countries to be open to change and to recognize the social value of altruism at the same time.

In Russia, just 2% belong to this category, while most Russians do not associate altruism with openness to change. Different countries have different proportions of individuals who are altruistic yet not afraid to take risks and do not expect the government to tell them what to do – 30% to 35% in the Nordic countries, 25% to 27% in Western Europe, 12% to 13% in the South of Europe, and 2% to 3% in post-socialist countries. Russia has a fairly high and constantly increasing proportion of people with individualistic attitudes.

2. Yaroslav Kuzminov, Lilia Ovcharova, Lev Yakobson et al.
Social Policy: Long-term Trends and Recent Changes

This is a short version; click here for the full report.

Russia today is not prepared for a radical change in social policy. A window of opportunity for such change has now closed, and the political agenda will be determined by the outcomes of parliamentary and presidential elections, where the key voters will be pensioners and public employees.

Piecemeal social policy change and tighter performance requirements for public service providers may be the only improvements possible before 2019, and even if implemented, they will be limited by current budgetary constraints.

Social welfare reform is a particular challenge: the share of social transfers in household revenues reached 18.6% in 2013, largely due to government handouts distributed without regard to the beneficiaries' actual income.

3. Eric Uslaner (University of Maryland, USA), Bo Rothstein (University of Gothenburg)
Mass Education, State-Building and Equality: Searching the Roots of Corruption

This paper was first published in 2012. The authors show a statistical link between education levels in 1870 and corruption levels in 2010 for 78 countries. The type of political regime is generally not significant. Societies where more people are educated give citizens more opportunities and power, reducing corruption.

4. Alina Pishnyak (IMHD), Natalia Khalina (IMHD)
Barriers to Passing the State Final Exams as Perceived by School Students' Parents in Moscow

Both high school students and their parents tend to hold negative attitudes towards the Universal State Exam (USE) and the State Attestation Exam long before the exams are due. According to a survey of 1,516 parents of school students, most expect their children to perform exceptionally well at the final exams and to score significantly higher than the average.

Their expectations towards the State Attestation Exam are even higher than of the USE. Paradoxically, most parents are also convinced that the test assignments are too complex and confusing and resent the fact that preparation for the exams requires a major investment of time and money while adding nothing to the student's knowledge; they also feel that the system is corrupt.

According to the parents surveyed, the rules of the game lack transparency, performance standards are revised almost every year, and teachers fail to properly prepare students for these exams. Both students and parents view the exams as a lottery, while teachers use them to intimidate students and keep them on their toes. This, according to parents, makes final school exams a source of tension and undermines the education system.

5. Paul Castañeda Dower (NES), Evgeny Finkel (George Washington University), Scott Gehlbach (University of Wisconsin-Madison), Steven Nafziger (Williams College)
The Substitutability of Collective Action and Representation: Evidence from Russia's Great Reforms

According to the Acemoglu-Robinson hypothesis, political liberalization occurs when the authoritarian elite is unable to otherwise maintain control and reduce social tension by redistribution of resources in favor of the excluded majority. Therefore, political liberalisation is likely only while the elite feels threatened. Once liberalisation occurs, tensions are reduced, since the decision-making power is shared with the formerly excluded majority

A key implication of the study is that political liberalisation is less likely in societies where the excluded majority is capable of collective action – e.g. via trade unions and the socialist movement – posing a threat of local unrest and riots. Elites in such societies find it easier to promise future redistribution thus winning over major opponents, while putting off liberalisation till later.

6. Fabrizio Zilibotti (Zurich University, Switzerland), Matthias Doepke (Northwestern University)
Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission

This paper is on the Opec's Best Foreign Studies 2014 list.

7. Alexei Zakharov (HSE)
The Loyalty-Competence Tradeoff in Dictatorships and Outside Options for Subordinates

Dictators rely on the loyalty of their subordinates to remain in power. In turn, a subordinate’s decision is affected by their payoff if the dictator is removed from power. This provides an incentive for the dictator to hire subordinates who have limited outside options. Thus, authoritarian leaders care more about their subordinates' loyalty than their competence, leading to the suboptimal selection of less competent officials who tend to be more loyal, as they are less likely to stay in office should the regime collapse.

8. Artem Edachev, Timur Natkhov, Leonid Polischuk (HSE)
Combat Experience and Social Capital: An Empirical Analysis

Historical events affect economic development, and their impact is sustained over time. Historical shocks – such as wars, epidemics and colonization – cause changes in cultural norms; wars can be particularly destructive and capable of dramatically changing the direction of the country's development and its social structure.

As people get involved in military action, their level of life happiness drops. On the positive side, people who have fought and survived in a war are free from learned helplessness and from viewing problems as insurmountable. In the USSR, World War II had a huge impact on the subsequent peacetime, which was permeated with military order and war expectations.

At the same time, war veterans acquired higher social capital, a sense of belonging to their country and willingness to share with others. Even children and grandchildren of the veterans have adopted this outlook and tend to be more prepared than others to help strangers, engage with them in joint action, and generally believe that everyone is the master of their own destiny

9. Marharyta Fabrykant, Vladimir Magun (HSE, RAS Institute of Sociology)
Pride in One's Country: Individual and Country-specific Determinants

National pride is a positive social attitude towards one's country. Two types of this sentiment may be identified, namely: 1) attitude based on personal experience, and 2) attitude adopted uncritically from one's environment.

There is little association between the former and the latter types. A rational type of pride involves benchmarking a nation's achievements against a certain standard and other nations' perceived successes. The latter type of pride is more concerned with indoctrination through the school system, mass media, language conventions, etc.

Countries with high levels of shared national pride include mainly Anglo-Saxon countries (plus South Africa and Venezuela, due to low expectations of their populations and the dominant political rhetoric).

Russians and people in other post-communist countries tend to have very low overall levels of national pride, since they measure their countries' achievements against a high standard. Russians, however, have a somewhat higher level of rational pride based on their assessment of the country's actual achievements (all findings are based on surveys conducted before 2014).

10. Flavio Bazzano, Roberto Gabriele (both from University of Trento), Anna Zadorozhnaya (Omsk State Transport University)
The role of covenants in bond issue and investment policy. The case of Russian companies

The inclusion of covenant clauses in bond prospectuses is positively related to the riskiness of the bond issues. At the same time, covenants included in bond contracts by Russian bond issuers in the international market do not correlate with the terms and conditions of their own bond issues in Russia. However, if the borrower has outstanding Eurobonds, they may have to use more stringent covenants in the domestic market. In addition to that, covenants reduce the cost of borrowing, but only in the case of Eurobonds.

11. Yulia Florinskaya (ISAF RANEPA)
Migrants in Moscow – Myths and Reality: Competition in the Labour Market? Burden on Health Care? Illegal Status a Conscious Choice?

40% of Muscovites believe that immigrants take away their jobs, even though unemployment in Moscow is extremely low (1.3%) and employment agencies offer plenty of vacancies. Moreover, only 7% of Muscovites have faced a situation where the employer chose to hire a migrant (including internal migrants) instead of them. Even though Muscovites often say they would accept low-skilled jobs, it is not normally reflected in their job application profiles. According to employers, there is hardly any competition for low-skilled jobs.

It is a myth that migrants compete with locals for jobs in Moscow; instead, migrants are prepared to work for less in worse conditions. It is also a myth that migrants are a significant burden on the public healthcare system.

In fact, Muscovites' negative attitudes are pushing migrants to choose an illegal status: most locals renting out to migrants refuse to legalise their stay through official registration. Similarly, most employers try to avoid signing formal contracts with migrants and tend to hire them by oral agreement.

12. Anton Kazun (HSE)
Tactics Used by Russian Lawyers with the Law Enforcement System: Between Cooperation and Confrontation

The legal profession is part of the law enforcement system, but at the same time lawyers are independent professionals and as such belong to civil society. This dual status tends to weaken lawyers' institutional position within the law enforcement system. What are some of the tactics employed by lawyers in these circumstances, given the Russian courts' well-known 'indictment bias'?

An extensive survey of 3,317 attorneys – 4.7% of the total number in Russia – has revealed three key tactics, namely cooperation, confrontation, and neutrality.

Lawyers who tend to recommend a plea deal (termed 'a special procedure' in Russia and saving the investigators a great deal of time and effort) are likely to have chosen the tactics of cooperation with the prosecution.

In contrast, lawyers who agree to take up civil cases are more likely to be independent. Those who mainly work on civil cases and rarely have to deal with plea bargaining often report violations of their clients' rights by prosecutors, judges and others. More 'cooperative' lawyers rarely encounter such violations – the law enforcement system returns the favour and cooperates with them in terms of procedure as well as outcome; such lawyers find it easier to get hearings, investigative actions, etc. scheduled at a convenient time. Independent and less cooperative lawyers earn more than their peers, but face more and harder work.

13. Natalia Zaichenko (HSE in St-Petersburg)
'Effective Contract' in General Education: Is It Realistic?

An expected transition to 'effective contracts' with school teachers linking remuneration to performance has been replaced by a salary increase, which has undermined the purpose of the reform. According to the Ministry of Education, by 2018, Russian schools will employ well-paid and forward-looking teachers whose students will benefit from career guidance and perform well in both Russian and international tests.

However, only some regions of the Russian Federation, such as Ingushetia, Chechnya and Dagestan, have a high proportion of young teachers, while in central Russia, their proportion is 2.5 times lower despite the fact that teacher salaries are above average.

Should a breakthrough occur in the quality of school education in Russia (as measured by student performance in PISA, PIRLS and TIMSS tests), it will have little to do with the 'effective contract' system.

The system itself is based on excessive reporting – teachers are expected to document every step they take as a proxy for performance measurement. In fact, the new system breeds complacency instead of better performance by both teachers and students.

14. Natalia Akindinova, Yevgeny Yasin (HSE)
A New Stage in Post-Soviet Russia's Economic Development

Russia is still choosing between two models of economic development: command-based vs. contract-based. The country's modernisation has been hindered by Russia's policy towards Ukraine; investments are continuing on a downward trend for the third consecutive year, and the state's influence on the economy has increased. The likelihood of positive future scenarios is limited.

This report examines three potential scenarios for the country's development:

1) modernisation from the top down (a 'no change' scenario in which current policy continues as the state’s resources get progressively depleted);

2) economic liberalisation, a scenario which is politically irrelevant;

3) incremental development, a cross between the first two scenarios.

15. Anton Kazun(HSE), Ekaterina Khodzhaeva (IRL, EUSPb) Andrei Yakovlev (HSE)
Russia's Lawyer Community

This paper is the first to describe the socio-demographic profile of Russian lawyers, their career strategies and specialisations. The paper also analyses the structure and dynamics of demand for legal services and their average earnings by specialisation. The author reports lawyers' perspectives on the performance of various law enforcement agencies and on incidences of violations against defendants. An interesting finding is that regions with higher rates of violations against defendants tend to have more practicing lawyers.

16. Stepan Zemtsov, Vladimir Eremkin and Vera Barinova (RANEPA)
Average USE Scores of Students Admitted to Leading Russian Universities and Factors Making Universities Attractive

According to this paper, the key factors in determining how attractive a university is (measured by the average USE score of enrolled students) include expected salary, brand recognition and quality teaching staff. In contrast, students applying for admission do not care whether a university engages in research or supports innovation-driven startups.

In the 2012/2013 academic year, the Russian universities deemed the most attractive included MIPT, MGIMO, MSU and HSE.

***

Limiting the list to just 16 papers presented at the XVI Conference is extremely difficult; therefore, a few more papers worth reading are added below.

A) Ekaterina Borisova, Andrei Govorun, Denis Ivanov, Irina Levina (HSE)
Who to Help? Trust and Preferences over Redistribution in Russia

The level of trust in a society determines whether people endorse government handouts to those who need them. People in Russia tend to justify handouts to those who have served the country, such as war veterans and public servants, but not to the poor, homeless, unemployed and disabled. Russians with high social capital tend to believe that government handouts should reward socially beneficial behavior, but cannot compensate for a lack of individual opportunity.

B) Daniil Alexandrov, Svetlana Savelyeva (HSE in St. Petersburg)
Social Reproduction of Inequality via Education: Local Context

Education should serve as a 'social elevator' by mitigating inequality and offering talented youth an opportunity to rise to the top no matter where they were born or how they were raised.

However, interschool differentiation works in the opposite direction. Alexandrov and Savelyeva examined the academic results of ninth-graders from 211 schools in St. Petersburg, 8 schools in Kirishi and 18 schools in Priozersky rural area and found that the school location perpetuates segregation by affecting students' learning outcomes.

C) Elena Deryugina, Alexey Ponomarenko, Alexey Porshakov, Andrey Sinyakov (all from the Russian Central Bank)

Short-term Assessment and Forecasting of the Russian GDP Dynamics Using a Dynamic Factor Model

The authors use the dynamic factor model to assess GDP dynamics based on available indicators. This is one of the first papers to examine Russia using the cutting-edge nowcasting techniques, where estimates gradually approach reality as new pieces of data become available. This model also allows for rolling year GDP forecasting.

D) M. Rochlitz, Vera Kulpina, Andrey Yakovlev (all from HSE), Thomas Remington (Emory University)
Performance Incentives and Economic Growth: Regional Officials in Russia and China

Both Russia and China have highly centralised public administration systems. But why does a system of performance incentives for regional officials work in China, but not in Russia?

Possible reasons may be that regional officials in Russia:

  • very rarely get promoted or reappointed for good performance;
  • hold office for too long (twice as long as their Chinese peers);
  • often live and work in the same regions where they govern;
  • are not rewarded for economic policy initiative; and
  • rarely have prior experience in managing large organizations.

E) Alexander Apokin (CMASF), Irina Ipatova (HSE)
Decomposing Total Factor Productivity in Russia Relative to Other Countries: The Role of Technical Efficiency

Prior investments in R&D contribute to the current total factor productivity (TFP); increasing private R&D spending by 1% will result in an increase in the TFP average growth rates by 1.2 pp after five years and total spending on R&D by 0.6 to 0.8 pp.

F) Ekaterina Moiseyeva (IRL EUSPb)

Type of Contract and Social Differentiation of Lawyers in Russia

The type of lawyer portrayed in mass media – rich, successful, cynical, active and well-educated – is rarely, if ever, found in the real world in Russia. There are two major categories of lawyers in the country: those appointed by courts and law enforcement agencies to take up criminal cases, and those working mainly on civil cases.

The former often act as if their clients are judges and law enforcement officers, rather than the defendant.

The latter type tend to be more mobile, active in court proceedings, and ready to confront the law enforcement authorities. Legal practice generally is not very lucrative in Russia, although the second type tend to earn more.

G) Victoria Levin (World Bank)

Time to retire: Analysis of older Russians’ retirement decisions

Russians tend to retire early for health reasons, even though the economic environment is pushing many pensioners to continue working. Better educated Russians tend to stay employed longer; flexible work schedules matter for women, but not for men.

H) Svetlana Mareeva (RAS Institute of Sociology)

How Russia's Middle Class Prefer Their Country to Develop

The core of Russia's middle class, i.e. the best educated and professionally successful 15% to 18% of Russians, tend to hold modernist attitudes and believe that the individual commands the circumstances of their own life, supporting one's family without government handouts is realistic, being unique is better than being like everyone else, initiative and entrepreneurship have more value than tradition, etc.

But even the middle classes do not always prefer modernist values over traditional ones, and tend to share the commonly held belief that the western model of development is not applicable to Russia. The middle class shares with the broader public its expectation for Russia as a socially-oriented mildly conservative country, and neither does the middle class differ from the rest of the public in terms of its attitudes towards political rights and institutions.

I) Maria Varlamova, Oksana Syniavskaya (HSE)

Aging in Russia: A Comparative Analysis of Russia's Rank in Active Aging Index and Global AgeWatch Index

Over the past 30 years, the median age of the world's population has increased by 5.9 years to 28.5. This median stands at 40.3 in Europe and 38 in Russia. By 2040, both the European and Russian populations will be 5 to 6 years older.

The Active Aging Index and the Global AgeWatch Index are based on parameters such as health, sense of well-being, security, and the opportunity for the elderly to participate in social life.

The report examines the reasons – both methodology-related and rooted in real-life problems – for Russia's ranking on both indexes.

The paper by Anna Ermolina, Maria Varlamova and Oksana Sinyavskaya (HSE) Active Aging Index as an Instrument of Evaluation of Social Policy Toward Elderly People in Russia suggests how these aging indexes can be used to inform social policies for the elderly. The key challenges include a lack of access to health care and the poor overall health, including mental health, of the Russian elderly.

J) Mikhail Denisenko, Vladimir Kozlov (HSE)
How the Demographic Change Impacts the Structure of Demand for Education

In the coming years, demographic change will affect the demand for education in Russia. The effect of Russia's 1992-2008 demographic dividend has been exhausted, and now the age ratios will change, affecting the demand for educational services, particularly for preschool institutions. The number of preschoolers in Russia will drop by some 20% between 2019 and 2030, followed by a gradual decline in the number of general school students expected to start in 2026. The number of university students will drop to a minimum in 2021 and then begin to rise again.

K) Olga Vendina (IGRAS)

Economic Inclusion and Social Exclusion: Helping Labour Migrants Settle in Moscow

Migrants' socialisation and integration are problematic in societies with low natural growth of the population. Moscow is no exception, with little cross-cultural communication and mutual adaptation between the locals and migrants. An increase in the number of migrants has been associated with an even greater split between 'us' and 'them'.

Restricting the inflow of migrants is a dead-end solution. Instead, the situation could change for the better if the authorities invested in building social trust and interethnic solidarity.

L) Alexandra Burdyak, Elena Grishina (RANEPA)

The Elderly in Russia: Inequality of Access to Modern Standards of Consumption

As Russians age, they experience increased deprivation due to poor health. In contrast, deprivation caused by poor infrastructure and inadequate housing tends to decrease with age.

The extent of deprivation-driven poverty depends more on employment than on age and particularly increases in the case of disability.

While employers in Russia deny that there is any discrimination against the elderly, most industries only offer low-paid and low-skilled jobs to older applicants.

M) Vasily Vlassov (HSE)
Why Is There No Health Care Reform in Russia?

The biggest challenge for Russia's health care system is not underfunding, but the fact that it remains a Soviet-style system, resisting reforms. The additional funds that have been flowing into the Russian health care over the past decade have in fact been used to delay reform. The system has failed to address the biggest problem with Soviet health care – inequalities in access to health services – and has continued for the 25 post-Soviet years to spend money on maintaining the status-quo. While the number of hospitals has decreased, no measures have been taken to improve community care and disease prevention services. Now that funding is scarce due to the current economic crisis, reforming health care is again on the agenda.

 

April 10, 2015