Are Russians Ready for Capitalism?

Abstract

Has popular support for the operation and outcomes of a market economy permeated the population outside of Moscow? Does the next generation of Russian policy makers and business leaders hold views consistent with a competitive market economy? Using the questionnaire employed by Shiller et al (1991), a survey of university students in Taganrog, Russian in the spring of 1999 takes a first step in answering these questions. The primary focus here is on whether there is evidence of popular support in Russia for: (1) private property/property rights, (2) prices adjusting to surplus and shortage conditions, (3) payment for services rendered or expenses incurred, (4) free enterprise, profit motive and rewards to successful business, (5) performance-based pay, and (6) taking a financial risk for future reward by investing in productive capacity. Probit regression results indicate significant differences between the opinions of Russian and American university students regarding market foundations and market outcomes. These survey results suggest that where significant differences emerge between Russians and Americans, the differences are likely to contribute to undermining the effective operation of a market economy in Russia. In some instances where significant differences between Russians and Americans emerge, these are driven by gender differences in Russia that are not matched in the U.S. In comparison to the 1990 survey results, there tends to be less support for market conditions and outcomes in the 1999 survey.