275 Published in ‘Corporate Restructuring and Governance in Transition Economies’ / edited by Bruno Dallago and Ichiro Iwasaki, New York: Palgrave Macmillan, 2007. – P. 275 - 296 Chapter 11 Evolution of Corporate Governance in Russia: Governmental Policy vs. Real Incentives of Economic Agents Andrei Yakovlev Abstract This paper is devoted to analyzing the evolution of corporate governance mechanisms in Russia. Special attention is paid to the causes of dramatic discrepancies between the expected outputs of institutional reforms implemented by the Russian government with the World Bank and IMF support and the actual behavior of Russian companies. Why was the model of interaction between enterprises and investors, owners and managers which had been successful in other countries actually rejected by Russian business in the 1990’s? And how can we evaluate certain positive change that has occurred recently in corporate policies of major Russian companies? The answer to these questions is given based on analysis of economic agents’ motivation at different stages of development of corporate structures in Russia. The paper argues that the need of comprehensive organizational and technological restructuring of enterprises caused the need to have a concentrated ownership structure. The formation of such a structure in the late 1990’s (which occurred, in fact, contrary to the government’s activities) created preconditions for extending the horizon of interests of dominating owners and managers and for positive qualitative changes in the relations between major Russian companies and their shareholders and investors. 11.1. Introduction Corporate governance mechanisms in Russia are the result of a large-scale institutional experiment performed by the Russian government in the early 1990’s with vigorous support of international financial institutions. The purpose of this experiment was to bring clear and a priori defined model of interaction between enterprises and investors, owners and managers to the Russian environment. The logic of law making – from defining a general privatization framework to specific activities to develop stock market infrastructure – was strongly influenced by the idea to create this model. Multi-billion loans were extended to the Russian