Attitudes towards privatisation in Russia

From the viewpoint of liberal economic theory, which underlies the Russian government's economic programme, privatisation should have at least two positive effects. First, it should produce an improvement in the performance of the privatised enterprises by making them economically accountable for their own performance and by providing an economic incentive for more efficient management. Second, it should give a broad segment of the Russian population a stake in the process of economic transformation through the transfer into their hands of some share of enterprise ownership on the basis of the issue of vouchers. The present article explores the second broad goal of Russian privatisation policy, namely the creation of a popular constituency for the government's market reform policy. Of particular interest is the impact of the process on employees of enterprises which have undergone privatisation. This group was more directly affected by the process than the general public and stood to experience the impact of the process in two ways. First, the compromise privatisation law which was finally adopted in 1992 offered each citizen the opportunity to gain a modest share in the process through use of a privatisation voucher. While this opportunity was available to all citizens, the details of the privatisation law gave enterprise employees an additional advantage, since the most popular of the three privatisation options offered to enterprises in the law permitted the enterprise collective to gain a majority (51%) of the shares in the newly privatised joint-stock companies. In this way enterprise employees could choose to use their vouchers to define a new relationship with their own employing organisation. A second impact of the privatisation process on this group derived directly from being employed by the privatising enterprise; here, employees, based on their own experience, could make a judgement about whether the process brought an improvement in enterprise operations. One task of this article is to examine whether this judgement has been a positive one and whether attitudes of those in privatised enterprises differ from attitudes of those who have not personally experienced the effects of privatisation. Survey data from December 1993 indicated that most Russian employees had unclear expectations about the likely impact of privatisation on their enterprise; just under 40% felt it was necessary, the same percentage were uncertain, and 20% felt it was unnecessary. Expectations about possible personal benefit were also divided. The article also explores other factors that have affected how Russians assess the privatisation process. This analysis will allow an assessment of whether the government's policy has succeeded in generating self-sustaining support for the privatisation impetus