Observations on the development of small private enterprises in Russia

A prominent Western specialist on the Russian economy presents an up-to-date overview of the country's small private business enterprises, here defined as registered enterprises employing up to 200 workers. Navigating through the inadequacies of the statistical evidence, the author presents and analyzes new data on size, employment, branch structure, geographical distribution, and related economic indices covering developments through the end of 1996. The paper highlights a number of factors that repress and impede development of small private enterprises, identifying among the principal obstacles arbitrary government regulation and punitive inspections involving extortion. Remedial measures in taxation and crime prevention as well as other forms of assistance are proposed and discussed.