New Horizons in International Business series
Edited by Ben L. Kedia and Kelly Aceto
Chapter 6: Liberalization of the electricity market in Russia: the tool of the growing democracy or dictatorship?
Russia as a large economy and a member of the BRIC states attracts the attention of scholars worldwide. Understanding the potential of its domestic electricity market would help in predicting Russia’s international energy strategies. Liberalization of its electricity market still leaves numerous questions that are not easy to answer. While a diversity of ownership in Russia’s electricity sectors is now comparable to many well-developed economies, the “map” of the presence of the state ownership reflects a high level of its influence over electricity market performance. Compared with other BRIC nations, Russia’s electricity market liberalization was rather successful although it differs from similar processes in Western economies because of a hidden “dictatorship” through state ownership in Russia’s transmitting sector. While the literature proves that state control makes organizations and industries less efficient, the emerging economies might have different conditions and pace for development, and state control could temporarily be a support for creating institutional isomorphism and polycentrism that add to a country’s political and economic stability. The research on institutional frameworks contributes to better understanding of the relationship between the state and businesses. Institutions establish rules and create an environment for business operations and networks, which influence countries’ economic development.
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