The Self-Empowered New Master at the Workplace: Privatization in Russia and China

Abstract

ABSTRACT In the dissertation the author explored how privatization in Russia and China shaped transition from state socialism. In the past two decades, many observers believe that Russia and China have moved along two different tracks in their transitions, and analyses about privatization in the two countries were mainly contributed by economists who focus on ownership change and corporate governance. However, the author found that, in the privatizations of Russia and China, the explanatory power of economics analysis is actually limited, because in both countries ownership structure of privatized firms often does not determine corporate governance. The factors that shape the perceptions of managers and workers on issues like property rights, managerial power, and the position of workers, and what the relationship is between their perceptions on these issues and the choices they made during the privatization process have not been properly explored before. The author discussed the value orientations of managers and workers, and the interactions between the two groups in Russia and China during privatization, and revealed that outcomes in privatization are shaped by social relations at the workplace, and also by social relations among bureaucrats, SOE managers, and private businessmen. Analyzing the sociopolitical and economic preconditions, guidelines, policy making ramifications, and processes and outcomes of the two privatizations, the author found that, although paths of the two privatizations are quite different, in both countries nomenklatura privatization prevailed. Former SOE managers personally invested only a little money, or nothing, have finally empowered themselves to be the new masters of the firms. In Russia and China, the nomenklatura privatization produced similar authoritarian management-worker relations at the workplace, which undermine performance of the privatized firms. Ultimately, Russia's economic transition has moved ahead without the real social reconstruction that occurred in Central Europe, with the result of a backsliding into a capitalist nomenklatura-authoritarian rule, and China's economic transition produces a unique communist capitalism, a new capitalism manipulated by the communist party, a first to be observed in world history.