Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches
The main idea of the paper is that a behavior of typical Post-Soviet Russian agent is inconsistent with the model of man offered by Neoclassical Economics. Author of the paper considers important deviations from this model such as bounded rationality, opportunism, investor myopia and behavioral depe...
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| Опубліковано в: : | Економічний вісник Донбасу |
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| Дата: | 2018 |
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Інститут економіки промисловості НАН України
2018
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| Назва журналу: | Digital Library of Periodicals of National Academy of Sciences of Ukraine |
| Цитувати: | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches / I. Rozmainsky // Економічний вісник Донбасу. — 2018. — № 4 (54). — С. 43-50. — Бібліогр.: 17 назв. — англ. |
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Digital Library of Periodicals of National Academy of Sciences of Ukraine| _version_ | 1859638773218803712 |
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| author | Rozmainsky, I. |
| author_facet | Rozmainsky, I. |
| citation_txt | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches / I. Rozmainsky // Економічний вісник Донбасу. — 2018. — № 4 (54). — С. 43-50. — Бібліогр.: 17 назв. — англ. |
| collection | DSpace DC |
| container_title | Економічний вісник Донбасу |
| description | The main idea of the paper is that a behavior of typical Post-Soviet Russian agent is inconsistent with the model of man offered by Neoclassical Economics. Author of the paper considers important deviations from this model such as bounded rationality, opportunism, investor myopia and behavioral dependency. The main reasons for these deviations are concerned with uncertainty and informational complexity. These external informational constraints are consequences of institutional changes in the Post-Soviet Russia, in general, and institutional inadequacy of the Russian authorities, in particular. The theoretical foundations of this paper are Post Keynesianism and Old Institutionalism.
Основна ідея статті полягає в тому, що поведінка типового пострадянського росіянина не відповідає моделі людини, запропонованої у неокласичній економічній теорії. Автор статті розглядає такі важливі відхилення від цієї моделі, як обмежена раціональність, опортунізм, інвестиційна короткозорість і поведінкова несамостійність. Основні причини для таких відхилень пов'язані з невизначеністю, а також складністю інформації. Ці зовнішні інформаційні обмежувачі є наслідком інституційних змін в пострадянській Росії в цілому та інституційній неадекватності російської влади зокрема. Теоретична основа статті – посткейнсіанство і старий інституціоналізм.
Основная идея статьи состоит в том, что поведение типичного постсоветского россиянина не соответствует модели человека, предлагаемой нео¬классической экономической теорией. Автор статьи рассматривает такие важные отклонения от этой модели, как ограниченная рациональность, оппортунизм, инвестиционная близорукость и поведенческая несамостоятельность. Основные причины для таких отклонений связаны с неопределённостью, а также сложностью информации. Эти внешние информационные ограничители являются следствием институциональных изменений в постсоветской России в целом и институциональной неадекватности российских властей, в частности. Теоретическая основа статьи – посткейнсианство и старый институционализм.
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I. Rozmainsky
43
Економічний вісник Донбасу № 4(54), 2018
UDC 330.83
I. Rozmainsky,
National Research University “Higher School of Economics”
Smolny College at the Saint Petersburg State University
HOMO POST-SOVETICUS: AN ATTEMPT OF ANALYSIS ON THE BASE
OF POST KEYNESIAN AND OLD INSTITUTIONALIST APPROACHES
Introduction. The thesis that the institutions of the
post-Soviet Russian economy do not correspond to the
institutions of a "normal" market economy has long
been commonplace. Among the various explanations of
such a “discrepancy”, in our opinion, so far not enough
attention has been paid to the analysis of the main ste-
reotypes and norms of the economic behavior of the
“post-Soviet Russians”1. This work aims to fill this gap.
The methodological basis of the research is the va-
rious elements of Old Institutionalism and Post Keyne-
sian Economics (branch of Keynesian "tree" very close
to Old Institutionalism).
The specificity of the approach proposed in the pa-
per is that those characteristics of economic behavior
that are interpreted as constants in neoclassical theory
(and in mainstream economics, in general) are treated as
changing variables, and such variability requires institu-
tional analysis. These constants, in our opinion, include
the following characteristics of economic behavior.
A) Full rationality. In the neoclassical theory, it is
usually assumed that in the process of decision-making,
economic agents consider all benefits and costs of each
of the possible choices. Thus, they fully take into ac-
count the existing constraints and opportunities. As a re-
sult, agents choose the optimal solution. That is why
complete rationality means optimization. All modern
mainstream economic models are based on this assump-
tion. Here the “constant” is the fullness of rationality, its
highest degree: all characteristics of all possible choices
are taken into account (see for more details Avtonomov,
1998; 2017).
The concept of bounded rationality was a slight de-
parture from this premise. This concept was developed
within the framework of Old Institutionalism and Post
Keynesian economics (Rutherford, 1995; Lavoie,
1993), but it was introduced by O. Williamson (1975) in
the mid-1970s into the framework of mainstream eco-
nomics2. The point is that the counting and cognitive
abilities of people are limited, so they cannot take into
account all constraints and opportunities during the de-
cision-making process. We will discuss it below.
B) A simple adherence to self-interest. In the neo-
classical theory, it is usually assumed that each agent
pursues his personal interest (as an “egoist”), but does
1 We apply concept of “Homo Post-Soveticus” only to the Post-Soviet Russians, but not to the Ukrainians, the Kazakhs,
the Lithuanians etc.
2 According to mainstream economics bounded rationality is consistent with maximization; heterodox economists believe
that people characterized by bounded rationality do not optimize.
not violate the rights and interests of others through the
violation of legal and moral norms. A departure from
this constant is the concept of opportunism proposed by
O. Williamson (1975) – and developed by us (it will be
discussed in the relevant section).
The following discussion focuses on constants,
from which neoclassicists (according to our opinion)
have never retreated.
C) Normal estimate of the future time. In the neo-
classical theory, it is usually assumed that each agent
values the present time more than the future, which is
expressed in the positive rate of time preferences. How-
ever, at the same time, economic events (flows of
money, goods, resources, assets) of the future time still
have value for it. Both of these prerequisites are embo-
died in principle, according to which the agent discounts
future variables at a positive and constant rate of dis-
count.
D) Independence of preferences from restrictions.
In the neoclassical theory it is usually assumed that the
preferences of each agent are formed by him inde-
pendently and do not depend on any restrictions, both
financial and social (Avtonomov, 1998. S. 126 – 130;
139 – 140). The simplest example is the consumer be-
havior model, in which the indifference curves and the
budget constraint line are determined by completely dif-
ferent factors.
E) Autonomy of expectations. The modern neoclas-
sical theory uses the hypothesis of rational expectations.
According to this hypothesis, each agent forms its own
expectations, independently collecting, processing and
using all available information (Avtonomov, 1998.
S. 162 – 163). This implies, in particular, that the expec-
tations of each agent do not depend on the expectations
of other agents.
F) Personal responsibility. In modern neoclassical
theory, it is assumed that each agent seeks to fulfil their
obligations to other agents.
In our opinion, it is useful to combine the last three
constants with the help of the term behavioral independ-
ence or behavioral autonomy. In other words, the agent
demonstrates behavioral autonomy, if his or her prefer-
ences do not depend on restrictions, expectations are
formed autonomously, and he or she shows personal
I. Rozmainsky
44
Економічний вісник Донбасу № 4(54), 2018
responsibility in fulfilling his obligations. The relevant
section will discuss it in more detail.
It is these characteristics that form the modern ne-
oclassical interpretation of the economic man – Homo
Economicus. We believe that none of the above charac-
teristics is applicable for the correct interpretation of the
economic behavior of "post-Soviet Russians"1. It seems
to us that such a description can be given by rejecting
these assumptions. Such a refusal just means we will
treat these described constants of economic behavior as
the changing variables (regarding constant and variable
rationality see Avtonomov, 2017).
Lowered Rationality. People behave fully ratio-
nally only in neoclassical economic theory. In heterodox
theories, as in real life, rationality is often bounded. The
low degree of rationality is interpreted by us (following
H. Leibenstein, 1976) as a low propensity to “calculate”
(possible benefits and costs of decision-making). “An
absence of tendency toward prudence” may be due ei-
ther to reasons that impede such calculations, or to rea-
sons that make them unnecessary (first of all, through
breaking the link between efforts and results).
To the first group of causes, we include external
informational constraints. We imply situations of lack of
information (uncertainty of the future), or its extensive-
ness, or its complexity (see in details Hodgson, 1997).
To the second group of causes, we attribute factors due
to the specifics of previous economic systems that
existed in a given country, as well as various non-eco-
nomic factors, in particular, of a geographical and cul-
tural nature. It should be borne in mind that all these fac-
tors can interact with each other. Consider first the role
of external informational constraints.
Generally speaking, the "transitivity" of any econ-
omy indicates the variability of its institutional environ-
ment. It is important because the Post-Soviet Russian
economy can be treated as “transitional” or “post-tran-
sitional” system. Institutions of the former economic
system are being destroyed, and their place is taken by
institutions of the new system. So, the economy in tran-
sition is system with a changing institutional environ-
ment. How does the changing institutional environment
affect the “external informational constraints” men-
tioned? The answer is obvious - negatively, in the sense
that abrupt institutional changes increase both the uncer-
tainty of the future and the complexity of information.
Firstly, drastic changes in the institutional environ-
ment make it difficult for economic agents to predict
both the actions and reactions of other agents and the
future economic environment in general. In short, the
degree of uncertainty of the future becomes higher in the
“transitional” conditions, and begins to decline only
1 Generally speaking, these characteristics are hardly applicable for the correct interpretation of the actual behavior of
actually existing agents in Western countries. However, we believe that, for a number of reasons discussed below, the behavior
of the “post-Soviet Russians” differs from the neoclassical model “Homo Economicus” in a more degree. In any case, the
analysis proposed in the paper is aimed at forming a methodological basis for creating a “theoretical model of man”, that is an
alternative to the model developed in the framework of neoclassical approach.
when the institutions of the type of economic system to
which this economy "moves" have been largely formed.
In principle, the allegations of a sharp increase in the
degree of uncertainty of the future in the Post-Soviet
Russian economy have long become commonplace and
do not need any evidence. Here, however, the fact that
such an increase acted as a serious barrier to rationality
of economic agents in the 1990s is important.
Secondly, during the transition to the economic
system of a new type, economic agents have to deal with
such information that they have never dealt with before.
A vivid example is the emergence of stock markets in a
transitional economy. The behavior of people in such
markets in the early years of the “transition” could not
be rational, as economic agents were faced with the
completely new information for themselves, because
there were no such markets in the planned economy. An
analysis of the balance of issuing companies, under-
standing the links between the macroeconomic situation
and the situation in the stock market and its segments –
such things went beyond the competence of stock mar-
ket participants in economies that started a “transition”.
Therefore, the collapse of these markets in Russia, Al-
bania and some other countries with a “transitional
economy” was not accidental (Bezemer, 2001). Another
example of increasing the degree of “complexity of in-
formation” is consumer goods markets. For decades,
Russian consumers have been living in a shortage of
many basic necessities, and then suddenly they encoun-
ter dozens and hundreds (if not thousands) of previously
unknown varieties of food, clothing, shoes, household
appliances, etc. It is clear that this is a case of informa-
tional complexity (as well as its extensiveness). Making
completely rational decisions in such situations proves
impossible (Hodgson, 1997).
In general, the Russian transitional economy was
characterized, at least in the 1990s, by very high degrees
of complexity (as well as extensiveness) of information
and uncertainty of the future, which severely con-
strained the rationality of the behavior of economic
agents. In the 2000-2010s, these factors largely retained
their strength. For example, the degree of complexity of
information has continued and continues to rise, largely
due to the very rapid development of the sectors related
to information and communication. Some young people
may not keep up with these changes, and their skills are
insufficient to collect and process the data necessary for
rational decision-making.
Among other factors leading to the uselessness of
optimization, first of all, the influence of the economic
system of planned socialism should be highlighted. The
Soviet power, through a system of centrally planned
I. Rozmainsky
45
Економічний вісник Донбасу № 4(54), 2018
economy, seriously discouraged a penchant for pru-
dence and personal economic independence. On the one
hand, it guaranteed a certain minimum set of benefits to
the Soviet person regardless of his efforts (and the en-
terprises were generally under soft budget constraints);
on the other hand, it did not allow him or her to increase
her personal material well-being above a certain level.
Such state paternalism instilled dependency attitudes
among the majority of the Soviet population and made
prudent behavior meaningless. Thus, perhaps, the Soviet
power managed to create a "new socialist man" (Kregel,
1995), "Homo Soveticus", and more so than the govern-
ments of Eastern European countries, where the system
of the planned economy, which adversely affects the de-
gree of rationality, existed almost half as much.
Finally, among other similar reasons, a low pro-
pensity to “calculate” can be attributed to the geograph-
ical environment: in the past, frequent crop failures in
rural areas also led to a gap between efforts and results.
However, as urbanization proceeded, this factor lost its
significance, and the low degree of rationality of Homo
Post-Soveticus is hardly connected with it.
Opportunism. Opportunism was defined by
O. Williamson as “self-interest seeking with guile”
(Williamson, 1975. P. 55), that is, as an excessive degree
of adherence to personal interest. This interpretation
contrasts opportunism with “a simple adherence to self-
interest.” We have already written about it above, and
O. Williamson defines him as such behavior in which an
economic agent seeks personal gain without impairing
the rights of other agents, but without focusing on their
interests. It is this characteristic of human behavior that
was tacitly assumed in almost all economic theory (not
only neoclassical one).
In our opinion, it is important that the degree of ad-
herence to personal interest, as well as the degree of ra-
tionality, can be a variable quantity. The degree of op-
portunism itself can change (although O. Williamson
and his followers do not write about this).
We believe that the degree of opportunism is deter-
mined by institutional factors, and, above all, by that
group of these factors which is related to the behavior of
the state. We mean, firstly, how much the state performs
its main institutional function related to the protection of
contracts, and, secondly, what kind of social ideology it
forms (or has already formed).
If the state effectively protects contracts, punishing
their violators, that it forms a social ideology that en-
courages honest, constructive work; if it discourages in-
centives to “use guile” and favors “hard work”, then the
degree of opportunism will be low. Agents will have
neither incentives nor the ability to "overly pursue their
self-interest." Unfortunately, in post-Soviet Russia eve-
rything was different. We argue that the post-Soviet
Russian state was characterized by institutional inade-
1 A business lobby estimates the damages at around 22 billion roubles, see Night of the Long Scoops (2018).
quacy, that is, by the inability or unwillingness to per-
form its basic institutional functions, and, above all, to
ensure the smooth operation of the contracting system.
Firstly, the post-Soviet Russian state extremely
poorly defends contracts. To a large extent, this is a con-
sequence of the underdevelopment of the judicial legal
system and (typical for Russia) dominance of the exe-
cutive power over other branches of power. For exam-
ple, such phenomena as the absence in laws of the defi-
nition of mechanisms for their implementation, the non-
enforceability of laws, an ambiguity of the formulations
contained in their texts, the incompatibility of different
laws with each other and “legal void” (such as the pres-
ence in one law of reference to another law which is ab-
sent) represented a common place in the 1990s and often
occur in the 2000-2010s. Moreover, the Russian state
often violated and violates its own obligations regarding
a protection of property rights and contracts. The most
striking recent example is famous Night of the Long
Sсoops – mass demolition of kiosk-like structures in
Moscow in 2016 February.1 The phrase of Moscow’s
major Sergei Sobyanin about the attempts to recover
losses “one cannot hide behind property papers” – to-
gether with his subsequent success at 2018 elections – is
the direct proof of the Russian government’s institu-
tional inadequacy.
Secondly, the post-Soviet Russian state contributed
to the formation of a social ideology that stimulates op-
portunistic behavior. To understand this, you must
firstly make relevant definition. By social ideology, we
understand the system of social goals and preferences,
which largely influences the goals and preferences of in-
dividuals. The very same social ideology is in complex
relations of mutual dependence with the informal rules
of the game and has a huge impact on human behavior,
ranging from the degree of adherence to self-interest and
ending with macroeconomic decisions (such as the pro-
pensity to save).
In economic history, as an illustration of the eco-
nomic role of social ideology, first of all, we can distin-
guish the period of development of capitalism in the
XVII-XIX centuries in a number of Protestant coun-
tries – first of all in the USA and Switzerland – where
the ethics of extreme Protestant sects (“Puritan ethics”)
dominated. The essence of this ethic was the ideology of
"worldly asceticism": a combination of maximum ef-
forts in the production sector (huge working efforts in
all forms, including entrepreneurship, rapid accumula-
tion of capital) and severe restrictions in the consumer
sphere (relatively small amounts of consumption and a
small amount of time spent on leisure). At the same
time, this ethics stimulated honest behavior in economic
life and maximum responsibility while observing con-
tractual obligations. Thus, the Puritan ethics provided a
very large incentive to work, entrepreneurship, savings
I. Rozmainsky
46
Економічний вісник Донбасу № 4(54), 2018
and investments, which had a positive impact on eco-
nomic growth, in particular, and on the emergence of
Western capitalism as an effective economic system, in
general.
Another example of the powerful influence of so-
cial ideology on economic behavior is communist ideo-
logy in the USSR and some other totalitarian states of
the twentieth century. There is no doubt that one of the
reasons for the rapid economic development of the
USSR in the 1920s and 1950s – along with the most bru-
tal methods of state coercion and the abundance of re-
sources – was Stalin’s ideology which regarded work as
a “matter of honor, valor and heroism”1. Thus, the So-
viet economy in the specified period of time was distin-
guished by a very high work / leisure ratio and the ab-
sence of aspects of “shirking,” which, of course, stimu-
lated economic development. On the other hand, the
slowdown in the 1970s and 1980s was to a certain extent
caused by the implicit penetration into the Soviet ideo-
logy of motives of dependency and avoidance of “hard-
working activity” – this was embodied in the well-
known maxim: “They pretend that we are paid for pre-
tend to be working."
In our opinion, the dramatic events that took place
in the 1990s in the Post-Soviet Russia economy can also
be largely explained by the peculiarities of group beha-
vior associated with social ideology. The fact is that at
the turn of the 1980-1990s, during the collapse of the
USSR and the establishment of Russia as a country with
a market economy, a radical change in social ideology
took place. Communist values were sharply "disman-
tled."
There was a huge ideological vacuum. It quickly
began to fill with aggressive propaganda in the state me-
dia of “bourgeois values”, or rather, with propaganda of
quick, immediate enrichment at any cost, consumption
of expensive, prestigious goods and, in general, “beau-
tiful life”. The new social ideology, the ideology of the
“luxury life”, which was actively implemented through
all media, had a powerful influence on the goals and
preferences of the majority of economic agents of the
Post-Soviet Russian economy. The most common con-
sequence of planting such a social ideology was the gen-
eral disregard for honest creative work. “Heroes of the
day” were prostitutes, financial speculators, or simply
notorious bandits. Those who did not directly become a
“criminal element” received great incentives for oppor-
tunistic behavior. In the 2000-2010s many bandits and
frauds became the part of the State bureaucracy, and the
problems of opportunistic behavior has been deepened.
Investor Myopia. As a rule, when making a
choice, people try – one way or another – to take into
account the consequences of their decisions not only in
the very near future, but also in the distant one. In this
case, the closer the period of receipt of money (or deli-
very of goods), the better. This aspect reflects, as noted
1 But, nevertheless, we treat the Stalin’s regime as criminal and flagitious!
above, a positive rate of time preferences, embodied in
the “subjective discount rate”, as well as a positive in-
terest rate. All this means that the more distant in time
flows of money or goods are discounted, taking into ac-
count the “increase” of the same discount rate (interest
rate). It reflects, as we have already written, a “normal
estimate of the future time”. It is a consequence from the
prerequisite of a normal estimate of the future time that
the vast majority of economic models, and not only
those related to the mainstream economics, proceed.
However, in a situation of higher uncertainty, for
example, due to the institutional inadequacy of the state
or a sharp transformation of the economic system, an es-
timate of the future will be distorted. Revenues of highly
distant future periods will be even less preferable for
people than in the “ordinary situation”. Then people will
discount such income at an increasing discount rate,
which means a short-term temporary orientation or just
short-termism (Dickerson et al, 1995). In other words,
each subsequent period will be discounted at a higher
discount rate than the previous one.
An even greater degree of uncertainty can distort
an estimate of the future even more, leading to investor
myopia. Investor myopia is an exception from conside-
ration of material and cash flows for certain future pe-
riods, which should occur later than a certain threshold
point in time (Bellais, 2004; Juniper, 2000; Rozmainsky,
2015). In other words, investor myopia is discounting
future variables at an infinite discount rate, starting from
a certain threshold point. The described phenomenon is
quite natural in “abnormal” situations such as the lack
of protection of forward contracts, inconsistency of the
legislative base of the economy or high socio-political
instability (it is clear that all of them are related to the
above-mentioned institutional inadequacy of the state).
It should be clear that investor myopia inevitably
gives rise to and / or intensifies the decline in invest-
ment, because it means a very short time range for mak-
ing decisions. After all, in fact, those investments in
fixed capital (and other assets) that can generate income
only after a long time period, are out of consideration if
this period of time comes after a certain threshold point
in time.
Thus, the consequences of investor myopia are ob-
vious: people exposed to this “disease” refuse to invest
with a long payback period. There is no accumulation of
many important types of physical and human capital,
technical development, and diffusion of innovations. An
economic system with an excessively low estimate of the
future time is doomed to stagnation or, at best, to low
growth rates.
Investor myopia can be quite easily generated (by
the already mentioned institutional inadequacy of the
state, which generates a high degree of uncertainty of
the future), but it is difficult to overcome. The fact is that
it is deeply rooted in the psychology and behavior of
I. Rozmainsky
47
Економічний вісник Донбасу № 4(54), 2018
people. There are many examples of this, and perhaps
the most convincing of them is the economic behavior
of Russians in the post-Soviet period. It was investor
myopia that was one of the most important factors that
triggered fixed capital investment collapse during the
1990s in post-Soviet Russia. It is also one of the most
important factors that led to the fact that the average age
of equipment in the domestic economy increased from
10.8 years in 1990 to 21 years in 2004 (beyond 2004 this
statistics became unavailable). Unfortunately, the pro-
cess of technological degradation continues in the 2000-
2010s.
In general, a low degree of rationality, (strong) op-
portunism and investor myopia can be interpreted as in-
terrelated "links of one chain", especially since investor
myopia can be viewed as a special case of a low "pro-
pensity to calculate", as well as a specific reaction to op-
portunism. Low “propensity to calculate” (as well as, to
a certain extent, investor myopia), in turn, can be both a
cause and a consequence of behavioral dependency dis-
cussed in the following section.
Behavioral Dependency. In order to understand
what behavioral dependency is, it is necessary again to
look in more detail at the opposite of this characteristic –
behavioral independence or behavioral autonomy. The
absence of this term in the mainstream economics is ex-
plained by the fact that this property is taken in it as a
“plain truth”. In other words, those agents who are con-
sidered in neoclassical theories and concepts of other
scientific traditions that fit into the mainstream (new
Keynesianism, new institutionalism, etc.) are characte-
rized by behavioral autonomy, that is, personal inde-
pendence in shaping preferences and expectations, as
well as in the fulfillment of its obligations. More speci-
fically, the agent is behaviorally independent if the fol-
lowing conditions are satisfied.
Firstly, his or her preferences are formed inde-
pendently of the existing restrictions, both financial
(budgetary) and “social/class”. "Neoclassical agent"
does not suffer from "green grape syndrome". He or she
does not cut back on his or her needs just because he or
she earns little, or because society (class) has inspired
him or her that these needs are “inadequate.” Although
"the phenomenon of reduced needs due to reduced op-
portunities to meet them has been described by a number
of researchers." (Avtonomov, 1998. S. 127). We empha-
size that in the number of restrictions we include not
only (and maybe not even so much) prices and income,
but also those stereotypes and norms that are imposed
on an individual by the society or class to which he or
she belongs. We refer to stereotypes and norms in rela-
tion to consumption, savings, portfolio choice, labor
supply, etc. The representative agent described by main-
stream economics has stable preferences independent of
such restrictions. His or her preferences do not depend
not only on financial receipts (and payments), but,
which is, in our opinion, more important, on society.
It should also be noted that the independence of
preferences from (financial and social/class) restrictions
is something broader than the absence of “external im-
pacts on utility” described in the famous article by
H. Leibenstein (1950). We mean the bandwagon effect,
the snob effect and Veblen effect. The fact is that such
external impacts on utility refer to the so-called “non-
functional demand”. By this term, economists imply the
demand that is not directly determined by the quality of
the product. If there are external influences on the uti-
lity, the agent buys the product because it is being
bought (or not bought) by other agents, or because the
product has a higher price (signaling “prestige”) than
other products.
The existence of such external influences, of
course, creates difficulties in the transition from indivi-
dual to market demand curves (and in general does not
correspond to the “standard” neoclassical approach), but
it is by no means the main factor in the dependence of
preferences on constraints. Such dependence means that
the agent begins to perceive the quality of the goods dif-
ferently under the influence of restrictions, and then his
“functional demand”, that is, the demand due to these
qualities, changes.
Secondly, agent's expectations are also formed by
him or her independently, or, in other words, autono-
mously. We mean that these expectations are based on
information received and processed by him or her per-
sonally, and not on following the rumors and conjec-
tures of other agents. Autonomy of expectations is com-
patible not only with the rational expectations hypothe-
sis mentioned above, but also with the equally well-
known adaptive expectations hypothesis, which is still
sometimes used in neoclassical theory. But, it is incom-
patible with the theory of conventional expectations, de-
veloped by J. M. Keynes (1937). In other words, the in-
dependence of expectations means that the agent, while
forming them, does not focus on the average opinion.
He or she does not use it as a substitute for inde-
pendently collected and processed information.
Thirdly, in fulfilling their obligations, the agent is
characterized by personal responsibility. He or she does
not fulfill his or her obligations only if it brings him or
her certain benefits. Generally speaking, personal
responsibility is closely interrelated with rationality of
behavior. We refer to the fact that the propensity to cal-
culate costs and benefits is both a cause and a conse-
quence of the agent's personal commitment to his or her
partners. It is unlikely that he or she will be able to fulfil
these obligations flawlessly if he or she does not behave
rationally. At the same time, rational behavior contri-
butes to personal responsibility (of course, in conditions
of a low degree of opportunism). In a broader sense,
“high degree of personal responsibility” means the ten-
dency of an agent to bear the burden of personal obliga-
tions to other agents.
I. Rozmainsky
48
Економічний вісник Донбасу № 4(54), 2018
Thus, as we have already written, behavioral
autonomy means independence of preferences from con-
straints, autonomy of expectations and personal respon-
sibility. All these aspects are admitted as an obvious
truth in mainstream economics, and first of all, in the
framework of the neoclassical approach. “An economic
person is characterized by the relative immutability of
his preferences, the way environmental information is
being processed, and the way expectations are formed.”
(Avtonomov, 1998. S. 32). However, when analyzing
the behavior characteristics of “Homo Post-Soveticus”,
this approach is not suitable. We argue that behavioral
autonomy is not a “default” property of a typical post-
Soviet Russian.
On the contrary, the most important characteristic
of “Homo Post-Soveticus” is behavioral dependence. In
other words, we believe that typical post-Soviet Rus-
sians are characterized by the dependence of prefe-
rences on financial and social class restrictions, non-
autonomy of expectations in the form of a tendency to
herd behavior during their formation and personal irre-
sponsibility, leading to non-fulfillment of obligations.
The causes of the behavioral non-independence of
Homo Post-Soveticus are rooted in its Soviet past. Such
reasons include the above-considered state paternalism
and soft budget constraints, characteristic of the Soviet
economy. As was again noted, these features formed de-
pendent behavioral attitudes among Soviet people. In
addition, the subordination of the interests of an indivi-
dual to the interests of society is often considered as an
element the traditional Russian economic culture. Per-
haps, collectivism and authoritarianism can be factors of
behavioral dependency that go back to the distant past.
It is through the concept of behavioral dependency
that the “adverse” phenomena of the post-Soviet Rus-
sian economy can be explained, such as massive invest-
ments of ordinary citizens in financial pyramids, con-
sumption of low-quality goods under the influence of
advertising, as well as massive violations and non-ful-
fillment of contractual obligations. These phenomena
were common in the 1990-2000s and are important now.
Is Typical Post-Soviet Russian Agent “Homo
Post-Soveticus”? Here we would like to present some
quote from one sociological study of young generation’s
values and preferences: “Our students ... by and large,
our young customers-consumers are a very peculiar
combination of personal characteristics. Internal and ex-
ternal neuroticity, narcissism, high self-conceit, Napo-
leon complex, uncritical attitude towards oneself, hyper-
activity and overdeterminism alternating with depres-
sions and falling activity, lack of labor discipline and
sustainability in solving life tasks, irresistible commit-
ment to unlimited choice and enumeration of contacts
and perspectives without fixing on any of them. What
economic behavior can we expect from this genera-
tion?” (Ermishina).
Let analyze it using the theory proposed above.
“Narcissism”, “high self-conceit”, “lack of labor dis-
cipline” are clearly compatible with the “low degree of
personal responsibility” described by us, and also with
opportunism.
“Lack of sustainability in solving life tasks” is
compatible with a focus on quick returns from economic
activity, and from here, “hand in hand”, to investor
myopia.
"Commitment to the choice ... without fixing on
any of them" is clearly compatible with the low degree
of rationality. A high degree of rationality, suggesting
optimization, is not conceivable just without fixing at
the best, optimal choice.
The standard neoclassical model – “Homo Eco-
nomicus” – should correspond to such qualities as
“commitment to choice with fixation on its specific op-
tions”, “presence of labor discipline”, “normal degree of
self-esteem” (rather than “self-conceit” and “narcis-
sism”) and “high degree of sustainability in solving life
tasks”.
We believe that the fundamental difference bet-
ween the “younger generations of the Post-Soviet Rus-
sians” and the old ones really lie in greater egoism, in-
dividualism, obsession with themselves and their prob-
lems, narcissism, neuroticism, etc. However, only indi-
vidualism and egoism are not enough to get closer to the
Homo Economicus model. Such qualities as the ten-
dency to prudence/propensity to calculate, patience in
anticipation of future results (embodied in a “normal es-
timate of the future time”), a high tendency to personal
responsibility, and the ability to form independent pre-
ferences are necessary. In short, Discipline, Calculation,
Patience and Responsibility are the most important cha-
racteristics of Homo Economicus. However, these qua-
lities are absent in the new generations of the Post-So-
viet Russians even to a greater degree than in represen-
tatives of older generations (It remains an open question
about how adequate these qualities are for modern West-
ern people, and accordingly, how well the neoclassical
model of man works in the Western world).
Conclusion. We conclude that the stereotypes and
behavioral norms of post-Soviet Russians that were
formed by the beginning of the 21st century are not con-
gruent to the formal institutions of an efficient market
economy. These stereotypes and norms do not contri-
bute to effective and rational decision-making, compli-
ance with laws and contracts, honesty in business rela-
tions, and production activities focused on long-term re-
sults. A typical “Homo Post-Soveticus” is an agent cha-
racterized by a low degree of rationality, a high degree
of adherence to self-interest (opportunism), investor
myopia and behavioral dependence. These characteris-
tics condition and strengthen each other. Some excep-
tion is only the direct correlation between opportunism
and behavioral dependency: the latter of these pheno-
I. Rozmainsky
49
Економічний вісник Донбасу № 4(54), 2018
mena is unlikely to lead to significant opportunism, sug-
gesting the opposition of personal interests to a collec-
tive one. However, investor myopia and a low degree of
rationality “together” give rise to compatibility between
opportunism and behavioral dependency.
As a result, decisions made by typical “Homo Post-
Soveticus” lead, at the micro level, to inefficient alloca-
tion of resources, and at the macro level to low or de-
creasing investments in fixed and health capital, as well
as technological degradation (or, at least, technological
stagnation). Here it is necessary to note the following.
Micro- and macroeconomic models created within the
framework of mainstream economics are hardly ade-
quate for analyzing both individual markets and the
macroeconomy, if there are agents on such markets and
in such an economy whose behavioral characteristics
correspond to “Homo Post-Soveticus”. Models that take
into account the simultaneous coexistence of low ration-
ality, opportunism, investor myopia and behavioral de-
pendency are needed.
In addition, as a result, the economy populated by
such agents turns into a set of closed local relations and
groups. The degree of mutual trust between agents with
described behavioral features in such an economy is
very low, and, accordingly, such an economy is charac-
terized by a low degree of “transparency”.
It is logical to name such economic system “fa-
mily-clannish” as opposed to the market system. The
above features hinder diffusion of innovations, techno-
logical progress and, of course, intensive economic
growth. In general, “family-clannish capitalism” is
doomed to economic stagnation and lag behind “nor-
mal”, “market capitalism” due to an unfavorable institu-
tional environment. One of the most important aspects
of such an environment is precisely the stereotypes and
norms of agents' behavior that form it, which were con-
sidered in this paper.
The main practical conclusion is that one can enter
the trajectory of rapid and sustainable economic growth
only when transforming the considered characteristics
of economic behavior. It cannot do without overcoming
the institutional inadequacy of the state and the deep re-
forms of formal institutions.
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Розмаїнський І. В. Homo Post-Soveticus:
Спроба аналізу на основі посткейнсіанского та
інституційного підходів.
Основна ідея статті полягає в тому, що пове-
дінка типового пострадянського росіянина не відпо-
відає моделі людини, запропонованої у неокласич-
ній економічній теорії. Автор статті розглядає такі
важливі відхилення від цієї моделі, як обмежена ра-
I. Rozmainsky
50
Економічний вісник Донбасу № 4(54), 2018
ціональність, опортунізм, інвестиційна короткозо-
рість і поведінкова несамостійність. Основні при-
чини для таких відхилень пов'язані з невизначені-
стю, а також складністю інформації. Ці зовнішні ін-
формаційні обмежувачі є наслідком інституційних
змін в пострадянській Росії в цілому та інституцій-
ній неадекватності російської влади зокрема. Теоре-
тична основа статті – посткейнсіанство і старий ін-
ституціоналізм.
Ключові слова: раціональність, обмежена ра-
ціональність, опортунізм, інвестиційна короткозо-
рість, поведінкова несамостійність, невизначеність.
Розмаинский И. В. Homo Post-Soveticus: По-
пытка анализа на основе посткейнсианского и
институционального подходов
Основная идея статьи состоит в том, что пове-
дение типичного постсоветского россиянина не со-
ответствует модели человека, предлагаемой нео-
классической экономической теорией. Автор статьи
рассматривает такие важные отклонения от этой мо-
дели, как ограниченная рациональность, оппорту-
низм, инвестиционная близорукость и поведенче-
ская несамостоятельность. Основные причины для
таких отклонений связаны с неопределённостью, а
также сложностью информации. Эти внешние ин-
формационные ограничители являются следствием
институциональных изменений в постсоветской
России в целом и институциональной неадекватно-
сти российских властей, в частности. Теоретическая
основа статьи – посткейнсианство и старый инсти-
туционализм.
Ключевые слова: рациональность, ограничен-
ная рациональность, оппортунизм, инвестиционная
близорукость, поведенческая несамостоятельность,
неопределённость.
Rozmainsky I. Homo Post-Soveticus: An At-
tempt of Analysis on the Base of Post Keynesian and
Old Institutionalist Approaches
The main idea of the paper is that a behavior of typ-
ical Post-Soviet Russian agent is inconsistent with the
model of man offered by Neoclassical Economics. Au-
thor of the paper considers important deviations from
this model such as bounded rationality, opportunism, in-
vestor myopia and behavioral dependency. The main
reasons for these deviations are concerned with uncer-
tainty and informational complexity. These external in-
formational constraints are consequences of institutional
changes in the Post-Soviet Russia, in general, and insti-
tutional inadequacy of the Russian authorities, in parti-
cular. The theoretical foundations of this paper are Post
Keynesianism and Old Institutionalism.
Keywords: rationality, bounded rationality, oppor-
tunism, investor myopia, behavioral dependency, uncer-
tainty.
Received by the editors: 26.11.2018
and final form 14.12.2018
|
| id | nasplib_isofts_kiev_ua-123456789-150149 |
| institution | Digital Library of Periodicals of National Academy of Sciences of Ukraine |
| issn | 1817-3772 |
| language | English |
| last_indexed | 2025-12-07T13:18:50Z |
| publishDate | 2018 |
| publisher | Інститут економіки промисловості НАН України |
| record_format | dspace |
| spelling | Rozmainsky, I. 2019-04-01T18:34:56Z 2019-04-01T18:34:56Z 2018 Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches / I. Rozmainsky // Економічний вісник Донбасу. — 2018. — № 4 (54). — С. 43-50. — Бібліогр.: 17 назв. — англ. 1817-3772 https://nasplib.isofts.kiev.ua/handle/123456789/150149 330.83 The main idea of the paper is that a behavior of typical Post-Soviet Russian agent is inconsistent with the model of man offered by Neoclassical Economics. Author of the paper considers important deviations from this model such as bounded rationality, opportunism, investor myopia and behavioral dependency. The main reasons for these deviations are concerned with uncertainty and informational complexity. These external informational constraints are consequences of institutional changes in the Post-Soviet Russia, in general, and institutional inadequacy of the Russian authorities, in particular. The theoretical foundations of this paper are Post Keynesianism and Old Institutionalism. Основна ідея статті полягає в тому, що поведінка типового пострадянського росіянина не відповідає моделі людини, запропонованої у неокласичній економічній теорії. Автор статті розглядає такі важливі відхилення від цієї моделі, як обмежена раціональність, опортунізм, інвестиційна короткозорість і поведінкова несамостійність. Основні причини для таких відхилень пов'язані з невизначеністю, а також складністю інформації. Ці зовнішні інформаційні обмежувачі є наслідком інституційних змін в пострадянській Росії в цілому та інституційній неадекватності російської влади зокрема. Теоретична основа статті – посткейнсіанство і старий інституціоналізм. Основная идея статьи состоит в том, что поведение типичного постсоветского россиянина не соответствует модели человека, предлагаемой нео¬классической экономической теорией. Автор статьи рассматривает такие важные отклонения от этой модели, как ограниченная рациональность, оппортунизм, инвестиционная близорукость и поведенческая несамостоятельность. Основные причины для таких отклонений связаны с неопределённостью, а также сложностью информации. Эти внешние информационные ограничители являются следствием институциональных изменений в постсоветской России в целом и институциональной неадекватности российских властей, в частности. Теоретическая основа статьи – посткейнсианство и старый институционализм. en Інститут економіки промисловості НАН України Економічний вісник Донбасу Economic Theory and History Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches Homo Post-Soveticus: Спроба аналізу на основі посткейнсіанского та інституційного підходів Homo Post-Soveticus: Попытка анализа на основе посткейнсианского и институционального подходов Article published earlier |
| spellingShingle | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches Rozmainsky, I. Economic Theory and History |
| title | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches |
| title_alt | Homo Post-Soveticus: Спроба аналізу на основі посткейнсіанского та інституційного підходів Homo Post-Soveticus: Попытка анализа на основе посткейнсианского и институционального подходов |
| title_full | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches |
| title_fullStr | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches |
| title_full_unstemmed | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches |
| title_short | Homo Post-Soveticus: An Attempt of Analysis on the Base of Post Keynesian and Old Institutionalist Approaches |
| title_sort | homo post-soveticus: an attempt of analysis on the base of post keynesian and old institutionalist approaches |
| topic | Economic Theory and History |
| topic_facet | Economic Theory and History |
| url | https://nasplib.isofts.kiev.ua/handle/123456789/150149 |
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