- Russia's Informal Economy:Rules of the Game for Business
Scholars of the informal economy have long agreed that its role is not confined to the presence of the informal sector, represented by informal employment or the concealed production of goods and services. The structuralist approach, which considers the informal economy to be a sector with clear boundaries, has its advantages because it allows for measuring the scale of informal economic activities that are not reported in official statistics and therefore fall outside state regulation and control. At the same time, this approach is incapable of capturing the wide range of informal practices, networks, power hierarchies, unwritten norms, and rules of the game that affect the interactions and behavior of economic actors. This special issue of Demokratizatsiya presents a collection of articles that examine various manifestations of informality in the Russian economy, and in particular the informal rules of the game that Russian businesspeople construct and follow in their relations with the state.
A broader view of the informal economy as a variety of manifestations of informality seriously complicates the conceptualization of this highly heterogeneous phenomenon. Different informal practices that serve as alternatives to formal rules can represent either manifestations of the "true market" or the abuse of power by state agents. Informality is a characteristic of both the survival strategies of the poor and the enrichment strategies of the rich. It can serve as a tool of resistance against state [End Page 3] pressure as well as of mobilization to capture the state. It can be used either to establish the rules of the game or to avoid them. The possibilities are endless. Informality is firmly woven into formal structures and organizations, making it difficult to trace the boundaries between formal and informal, functional and dysfunctional, and even legal or illegal.
In the article that opens this issue, Jeremy Morris addresses the issue of conceptualizing informality by contrasting traditional dualistic perspectives with a holistic approach that takes an "imbricated" perspective on informality. Instead of separating informality from economic life, the holistic approach proposes to consider it as integrated into various organizational and institutional structures. From this perspective, imbrication reflects the social "embeddedness" of the informal economy, meaning that a certain mode of informality would not happen if it were not imbricated with particular state and market institutions. Imbrication is described by the author as "a sensitizing and signposting concept rather than a wholly original formulation." To justify the suggested conceptualization of informality, the author develops three interrelated meanings of imbrication. The first is related to labor and economic activities and demonstrates the problem of untangling formal from informal. The second refers to state practices and bureaucratic rulemaking, examining "how difficult it can be to separate the economic from the political or social, as well as the microlevel from the meso-level." The third considers imbricated rationalities, exploring the complexity of agents' own economic and social reasonings. All three meanings of imbrication are illustrated by empirical examples from the author's ethnographic work in Russia.
Although informality is recognized as an integral feature of any society, studies of the informal economy traditionally focus on post-communist and developing countries. In Russia, the informal economy became a particularly popular subject during the 1990s, when market reforms and the subsequent economic crises gave rise, on an unprecedented scale, to all sorts of manifestations of informality. The domination of informal practices and relations in the Russian post-Soviet economy was primarily explained by the socio-cultural legacy of socialism or the underdevelopment of the newly established market institutions. However, even after a decade of market reforms, informality had not disappeared from the Russian economy. Instead, informal economic practices and relationships had acquired a systemic character that was affecting economic development.1 Thus, informal employment and the prevalence of informal relations in the labor sphere have become a key characteristic of the specific institutional model of the Russian labor market, which explains its unconventional [End Page 4] response to economic challenges.2 Studies of the Russian business sphere reveal the institutionalization of informal relations and networks, allowing us to speak about the replacement of formal institutions with informal ones.3...