State Ownership: Quick Privatization or Effective Governance?

The paper considers main stages and specific features of state sector development in the Russian economy. The model of the 1990's was characterized by mass privatization and lack of attention to the procedures of corporate governance in companies with state participation. In the second half of 2000's this model had been replaced by the model associated with the expansion of the public sector in the economy and the improvement of corporate governance in companies with state participation. The article discusses actual goals and various ways of company privatization. The need for a new wave of privatization in Russia is justified by the signs of suppressed competition, low incentives to modernization and innovation, the complexity of managing a large and diverse public sector. Key issues of corporate governance development in state-owned companies are discussed. They include the uncertainty of the real goals of the government and the lack of their implementation in a public document, the practice of the Board of Directors formation and the principles of participation of representatives of the state in it, the lack of transparency of corporations, and the presence of stable and effective corporate governance procedures during the privatization process.