The Role of State Corporations in Redesign of Sectoral Supply Chain Management

Abstract

The article discusses the problem of supply chain management in economy of Russian Federation. The institutional analysis revealed a trend towards the restoration of the supply chain management system that operated during the Soviet period on the basis of a transition to the manual economy management mode. The modern system of supply chain management of Russia has a number of differences from the Soviet model such as market pricing and distribution channels of the product, and it designed to implement the policy of import substitution in the Russian economy. The state corporation was chosen as the most appropriate organizational form to solve amassed structural problems. High risks of investing to the Russian economy, insecurity of private property rights, monopolization of certain sectors of the economy are creating an unfavorable institutional environment for business. Under these conditions, instead of expanding and encouraging the activities of private entrepreneurs, the state chose a different way to solve the structural problems of the Russian economy - withdrawing funds through taxes and distributing them through budgets of all levels to state corporations that are headed by the persons closest to power. The article shows that this path led to the restoration of the supply chain management system that was very characteristic to the Soviet economy. Since the experience of such management turned out to be negative, its repetition in the new market conditions is unlikely to bring a positive result, however, the government’s strategy does not provide for the possibility of replacing budget investments with private ones, as a result of which budget investments increasingly dominate, private investments are reduced, capital outflow is increasing, and the economy remains inefficient.