ECPR

Install the app

Install this application on your home screen for quick and easy access when you’re on the go.

Just tap Share then “Add to Home Screen”

ECPR

Install the app

Install this application on your home screen for quick and easy access when you’re on the go.

Just tap Share then “Add to Home Screen”

Back to Paper Details

Political control over Russia’s energy market on the example of gas industry

Open Panel

Abstract

Natural resources are very important to the economics of the state. In case the amount of cash generated from the natural resources becomes significant to the state budget the decision and strategy of the companies operated in that segment becomes strategic for the state. The state controls the strategic sector of economics. But the manner and the form of controls differ from state to state. What is acceptable for resource pure countries could cause harm for resource rich countries. The research paper will be concentrated around the problems of political controls over Russia’s energy market on the example of gas industry. In this respect, it could be useful to analyze Russian drivers from an institutional perspective. In particular, interests would be useful to apply the ‘agent-principle’ perspective. This theory addresses two issues: • When the goals of principal and agent are different • And when a principal and an agent have different attitude towards the risk (risk sharing problem) Discrepancies in goals are determined by the different attitude to the problem to be solved. The risk sharing problem by the action taken and its consequents is the more complex issue. The principal hires an agent to resolve the special case under conditions which are preferable for the principal in the current moment. The agent could have the different interests and attitude to the case. So the attitude towards the same risk is different. The political control over the main agent of gas industry is executed on the formal and informal ways. Formal way is represented by the legal regulation of the industry (state acts, laws and regulations). Informal way is expressed by the various groups of interests and personal relations between key persons. The principal – agent relations are becomes more complex issue by identifying the third party influencing on the relations in the particular situation. (the case with triangle Gazprom- Transneft – State in decision taking matter in gas industry).