Vol.:(0123456789) Constitutional Political Economy https://doi.org/10.1007/s10602-019-09289-z 1 3 ORIGINAL PAPER Determinants of governmental support of Russian companies: lessons on industrial policy, rent‑seeking and corruption Dennis Coates 1,2  · Iuliia Naidenova 2  · Petr Parshakov 2 © Springer Science+Business Media, LLC, part of Springer Nature 2019 Abstract The Russian government has programs to assist Russian companies with fnan- cial and organizational support. Award of procurement contracts may also serve as assistance to companies. This paper uses data from a survey of Russian companies to draw inferences about the motivation behind the choice of recipients. Possible motivations are an intent to foster economic development, successful rent-seeking by recipients or simply corruption. The evidence is mixed. There is support for both the economic development motive and rent-seeking in the analysis of fnancial and organizational support. A role for corruption is most evident in the procurement contract results. Keywords Government support · Procurement · Industrial policy · Bribery · Public choice JEL Classifcation D73 · H00 · H57 · L38 · O25 1 Introduction Russian government and business is perceived as corrupt. Transparency Internation- al’s Corruption Perceptions Index for 2016 rated Russia as the 131st least corrupt country, out of 176, tied with Iran, Kazakhstan, Nepal, and Ukraine. The Economic Freedom Index of the World 2018 places Russia as the 107th most unfree country, out of 180. Tajikistan is one place ahead and Belarus one place behind it in the over- all ranking. Russia scores 48.7, compared to the high score of 98.4 by Singapore, regarding protection of property rights and concerning integrity of government, * Dennis Coates coates@umbc.edu 1 University of Maryland Baltimore County, Baltimore, USA 2 National Research University Higher School of Economics, Perm, Russia