Will Public-Private Partnerships Help Overcome the Stagnation Trap?

Abstract

The article discusses the features of the current model of the Russian economy, which led to both rapid growth in the early 2000s and the subsequent period of long stagnation. According to the authors, to get out of the stagnation trap it is necessary to shift the emphasis in the state regulation of the economy. From the increase in the public sector in the economy and the expansion of large corporations in the most important sectors of the financial and non-financial sectors should move to partnership schemes focused on long-term cooperation between the state and business in different areas. One of the formats of such interaction can be the development of public-private partnership (PPP) if it will not be of the nature of “quasi-PPP”, largely based on the forced for business interaction with the authorities under the scheme “money in exchange for loyalty” and mainly used for fiscal purposes and for the extraction of administrative rent. According to the authors, changes in the legislation and in the actual practice of its application in the direction of transition to mutually beneficial schemes of relations between the public and private parties to partnership agreements can transform PPP into a predominantly inclusive institution that contributes to sustainable economic growth. In combination with the transformation of the motivation of national business elites, this will facilitate the transition to a qualitatively new model of development of the Russian economy, based on a reasonable combination of private initiative with state support for socially significant projects.