Legal Basis for Transformation of Public Property and Russian Legislation on Privatization in the 1990s

Аннотация

The article discusses the history of the legislation on privatization in Russia and features of use of privatization as a regulator of the modern economic policy in the Russian Federation. The author shows the unique experience of privatization in Russia in the 1990s, which allowed rapid creation of private sector in the Russian economy. Privatization as a paradigm of modern economic policies of developed countries has now become truly universal. Having replaced the strategy of state intervention in the economy, the policy of privatization rapidly covered the majority of foreign countries in the early 1970s. In Russia, privatization has become one of the key elements in the system of market reforms and decentralization of the economy. In contrast to countries with developed market economies, where the transfer of the state-owned property into private ownership helped increase the effectiveness of individual enterprises, privatization in Russia was intended to provide a radical shift in property relations. The article analyses different approaches to defining privatization, including the approaches provided for in the legislation in regards to this term, highlights the main stages of the Russian legislation development in the field of privatization. The legislation on the “first wave” of privatization had been launched in 1992, when Russia began the “voucher” privatization (1992-1994) featured by using vouchers as means of payment (hence, this stage was called “voucher” privatization). A privatization voucher did not certify its owner's right to the share in the public property. It was a kind of government security, the yield of which was dependent on the method of its use by the owner. By purchasing shares for privatization vouchers, their owners could earn income through the sale of shares or in the form of dividends to be paid. After the voucher privatization, the government moved towards a new model, known as “monetary privatization”. Main reason for transition to monetary privatization was urgent need for federal budget revenues and the need for investment for structural transformation of the Russian economy. The article describes mortgaging auctions, which were among the non-standard forms of privatization used in practice at that period. Individual privatization projects can also be referred to the nonstandard forms. They included measures aimed at privatization of public property particularly important for the state, region or industry, and providing for the pre-sale preparation of the property with assistance of an independent financial consultant.