Russia's Federal Relations: Putin's Reforms and Management of the Regions by Elena Chebankova

Author:Elena Chebankova [Chebankova, Elena]
Language: eng
Format: epub
Tags: Ethnic Studies, Regional Studies, History & Theory, Human Geography, Political Ideologies, Comparative Politics, Social Science, Political Science, Nationalism & Patriotism, World, American Government, State, General, Russian & Former Soviet Union
ISBN: 9781135181390
Google: Ay2MAgAAQBAJ
Goodreads: 17510578
Publisher: Routledge
Published: 2009-12-04T00:00:00+00:00

Theoretical and comparative considerations

Before proceeding to elaborate on the nature of cultural constraints, it is important to underscore that the Kremlin’s steps towards bringing certain aspects of corporate activity under state control does not make Russia an outlier among the world’s leading economies. Looking at the range of Putin’s second-term policies towards formalisation of business-political relations in the regions, it becomes clear that these measures do not represent a ‘specifically’ Russian invention, or a set of regulations aimed exclusively at tightening an authoritarian grip of the Kremlin over the business community. Rather, with the exception of the new gubernatorial elections system, these policies largely resembled measures that have been well entrenched in the West for some considerable period of time.

First, the corporate social responsibility notion emerged in the United States as early as in the 1890s. This was associated with the need to regulate trusts and monopolies, labour-employers relations, and safety in various industries (Farmer and Hogue 1973, p. 2). Comprehensive academic and political debates on the CSR surfaced in the West in the 1950s (Fairbrass 2006, p. 5), and recent decades have seen the proliferation of discussions with numerous seminars, workshops and publications emerging on the market (Cespa and Cestone 2004). New requirements for standardised companies’ CSR reporting have emerged. The EU Commission established a European Alliance on CSR, inviting all members of the business community and participating governments to debate on this subject, bring it into the public domain, and render the business-political dialogue in this sphere more transparent.32

It is fair to say that the introduction of this concept was not easy. Numerous sceptics (Levitt 1958, Friedman 1970) insisted that maximising profits should be considered as a ‘primary social role’ of a business. Less pessimistic authors (McWilliams et al. 2006, pp. 3–4; Hart 1995; Barney 1991) found that firms should adopt a ‘resource-based-view’ towards the CSR, thus making socially responsible behaviour more popular among the general public and, thereby, increasing their competitive advantage and profits. Others (Jones 1980; McWilliams et al. 2006) contended that the CSR is an ethical issue and, from that point of view, should be a voluntary matter of choice. Irrespective of the multitude of approaches, the literature agrees (see Beesley and Evans 1978, p. 13) that the CSR goes ‘beyond compliance and engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law’.

Second, tax optimisation schemes have been targeted by the governments of most advanced capitalist economies. This is particularly true of transfer price and cross-regional fiscal manoeuvrings. To make my definitions clear, by transfer price I refer to the unit price assigned to goods and services transferred between the parent company and subsidiaries or between divisions within the same firm (Tang 1979, p. 2). If such divisions are located in separate regions with differing fiscal jurisdictions, or even in separate countries, multi-unit corporations could manipulate the level of prices on goods and services transferred between these divisions in order to reduce their tax burden.

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