Measuring Institutional Change: The Case of the Russian Banking Industry

Abstract

The paper tries to measure institutional change in the banking industry, taking the case of Russia in 1991-2016. I put forward a set of metrics featuring the actors and the relevance of banking for the economy. At the first stage, the communist-era credit system falls apart as do coordination mechanisms between monetary and real sectors of the economy. After the 1998 crisis, the change goes in the direction of greater government involvement in banks and centralized allocation of financial resources. Structural change has not yet completed an institutional one with regard to the modus operandi of the banking industry. I interpret empirical findings as search for a sustainable proportion between dominant institutions and complementary institutions inherent to Russia. The contribution of this paper is that it proposes a set of metrics quantifying institutional change in a particular economic sector.

Keywords: evolutionary analysis, institutional change, mesoeconomics, banks, Russia, state

JEL Classification: B25, G21, G28, H82, P20, P34, P52