1. Higher School of Economics, Moscow, 2011 www.hse.ru Logics of Justification for State Regulation in Russia (A Case of the Trade Law) Maxim Markin Laboratory for Studies in Economic Sociology Higher School of Economics, Moscow, Russia mmarkin@hse.ru 11 Annual Aleksanteri Conference “The Dragon and the Bear: Strategic Choices of China and Russia” 11 November 2011

2. Higher School of Economics, Moscow, 2011 Process of Passing the Trade Law Until 2006: the relationships of retailers and their suppliers had been taking place without any state interference The end of 2006: public discussions about the necessity of the state regulation of Russian retail industry began The middle of 2008: the idea of passing the trade law was put to the back burner The beginning of 2009: the introduction of the trade law became an agenda item again The middle of 2009: the process of passing the trade law started The end of 2009: the trade law was passed

3. Higher School of Economics, Moscow, 2011 Research Problem Until 2006 retailers and their suppliers had been solving the problem of coordination without any state interference After 2006 the process became public and in 2009 the trade law was passed But the problem was not solved It is quite difficult to understand why the market actors who really wanted to come to an agreement could not do it

4. Higher School of Economics, Moscow, 2011 Main Hypothesis While justifying their opinions business partners used different logics of justification and it was an obstacle for them to come to an agreement

5. Higher School of Economics, Moscow, 2011 Theoretical Basis MarketIndustrialCivic Mode of evaluation (worth) PriceProductivity efficiencyCollective interest Format of relevant information Monetary Measurable criteria, statistics Formal, official Elementary relationExchangeFunctional linkSolidarity Human qualification Desire, purchasing power Professional competency and expertise Equality Worlds of justification (L. Boltanski, L. Thevenot)

6. Higher School of Economics, Moscow, 2011 Logics of Justification for State Regulation MarketIndustrialCivic What is important?CompetitionStabilityEquality Who are market actors? CompetitorsBusiness PartnersCitizens What do support? and What is supported? Competition – Effective companies Stability – Investments Equality – Solidarity What do develop the economy? Effective CompaniesInvestmentsSolidarity

7. Higher School of Economics, Moscow, 2011 Methodology The empirical data which include: 1. Mass Media publications (71 articles in 15 the most popular Russian journals, magazines and newspapers) 2. Transcripts of the discussions in the Russian Parliament (the first reading, the second reading and the final reading) 3. Seven interviews with market actors

8. Higher School of Economics, Moscow, 2011 Logics of Justification for State Regulation of the Trade Industry in Russia (1) MarketIndustrialCivic Aim 1 to defend the competition to defend the competitors to defend the consumers Example of Arguments It is necessary to defend the market mechanism of price making It is necessary to defend small Russian agricultural producers It is necessary to defend poor Russian consumers Aim 2 to ensure the normal functioning of markets to ensure the stable functioning of enterprises to ensure the equal rights of market actors Example of Arguments It is necessary to ensure the make-out of retailing It is necessary to ensure the investments in innovations by enterprises It is necessary to settle the conflict between retailers and their suppliers

9. Higher School of Economics, Moscow, 2011 Logics of Justification for State Regulation of the Trade Industry in Russia (2) MarketIndustrialCivic Aim 3-- to ensure the food security of the country Example of Arguments-- It is necessary to decrease the dependence on the food import in Russia

10. Higher School of Economics, Moscow, 2011 Logic of Justification for State Regulation of Market Actors Retailers were against the trade law and they justified their opinion basing on the market logic Suppliers being the main opponents to retailers supported the trade law and they justified their opinion basing on the industrial logic The state had the most sophisticated opinion because different ministries and departments used arguments basing on different combinations of civic and other logics

11. Higher School of Economics, Moscow, 2011 Conclusion The problem of coordination in Russian retail industry has appeared because retailers and their suppliers could not come to an agreement about some details in their relationships They started to justify their opinions about the enactment of the trade law The winners based on the sophisticated combination of the industrial logic and the civic logic

12. Thank you for your attention!