Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism
The article considers the influence of the complexity of the social system on the growth of financial costs for the maintenance of the central management system. The subject of the article is Professor Dmitry Sorokin’s theory that Russia cannot be a world technological leader due to objective reason...
| Main Authors: | , |
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| Format: | Article |
| Language: | Russian |
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Government of the Russian Federation, Financial University
2021-02-01
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| Series: | Финансы: теория и практика |
| Subjects: | |
| Online Access: | https://financetp.fa.ru/jour/article/view/1136 |
| _version_ | 1826565272638586880 |
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| author | E. V. Balatsky N. A. Ekimova |
| author_facet | E. V. Balatsky N. A. Ekimova |
| author_sort | E. V. Balatsky |
| collection | DOAJ |
| description | The article considers the influence of the complexity of the social system on the growth of financial costs for the maintenance of the central management system. The subject of the article is Professor Dmitry Sorokin’s theory that Russia cannot be a world technological leader due to objective reasons: a large territory, a severe climate, a multinational and multi-confessional composition of the population. These conditions predetermine a strong power vertical and increased financial costs, leading to the bureaucratic despotism and worse effectiveness of market innovation mechanisms. The relevance of the problem is in the need to clarify the management capabilities and limitations of regimes with strong centralized power. This issue is becoming more urgent due to the fact Wagner’s law, which requires faster growth of public expenditure compared to the economy, has ceased to operate. The article aims to theoretically illustrate and to test the theory by D. Sorokin. On this purpose, the authors built a simple theoretical model of economic growth with an institutional factor reflecting the properties of the control system. The novelty of the approach consists in building an institutional function that includes management costs for maintaining the internal integrity of the country and its external security, the management potential (“strength”) of the central government and the mechanism of market selfgovernment. The initial driving force of the model is the growing complexity of the managed system, which, by D. Zolo’s complexity theory, leads to the wide spread of authoritarian political regimes. The analysis of the model and computational experiments allowed to establish the conditions when Sorokin’s theory is valid and when not. The calculations have led to the conclusion that even a tough authoritarian rule can stimulate the country’s economic development, provided that the current system of central government is highly efficient and low in financial capacity. |
| first_indexed | 2024-04-10T02:36:36Z |
| format | Article |
| id | doaj.art-27a8448a5e3d4b158333c87a6b85b05f |
| institution | Directory Open Access Journal |
| issn | 2587-5671 2587-7089 |
| language | Russian |
| last_indexed | 2025-03-14T10:33:07Z |
| publishDate | 2021-02-01 |
| publisher | Government of the Russian Federation, Financial University |
| record_format | Article |
| series | Финансы: теория и практика |
| spelling | doaj.art-27a8448a5e3d4b158333c87a6b85b05f2025-03-02T11:02:02ZrusGovernment of the Russian Federation, Financial UniversityФинансы: теория и практика2587-56712587-70892021-02-01251708310.26794/2587-5671-2021-25-1-70-83830Power, Market and social system Complexity: Theoretical Model of Financial and Management MechanismE. V. Balatsky0N. A. Ekimova1Financial University; Central Economics and Mathematics Institute Russian Academy of SciencesFinancial UniversityThe article considers the influence of the complexity of the social system on the growth of financial costs for the maintenance of the central management system. The subject of the article is Professor Dmitry Sorokin’s theory that Russia cannot be a world technological leader due to objective reasons: a large territory, a severe climate, a multinational and multi-confessional composition of the population. These conditions predetermine a strong power vertical and increased financial costs, leading to the bureaucratic despotism and worse effectiveness of market innovation mechanisms. The relevance of the problem is in the need to clarify the management capabilities and limitations of regimes with strong centralized power. This issue is becoming more urgent due to the fact Wagner’s law, which requires faster growth of public expenditure compared to the economy, has ceased to operate. The article aims to theoretically illustrate and to test the theory by D. Sorokin. On this purpose, the authors built a simple theoretical model of economic growth with an institutional factor reflecting the properties of the control system. The novelty of the approach consists in building an institutional function that includes management costs for maintaining the internal integrity of the country and its external security, the management potential (“strength”) of the central government and the mechanism of market selfgovernment. The initial driving force of the model is the growing complexity of the managed system, which, by D. Zolo’s complexity theory, leads to the wide spread of authoritarian political regimes. The analysis of the model and computational experiments allowed to establish the conditions when Sorokin’s theory is valid and when not. The calculations have led to the conclusion that even a tough authoritarian rule can stimulate the country’s economic development, provided that the current system of central government is highly efficient and low in financial capacity.https://financetp.fa.ru/jour/article/view/1136government expenditurewagner’s lawashby’s law of requisite varietysedov’s law of hierarchical compensationcomplexity |
| spellingShingle | E. V. Balatsky N. A. Ekimova Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism Финансы: теория и практика government expenditure wagner’s law ashby’s law of requisite variety sedov’s law of hierarchical compensation complexity |
| title | Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism |
| title_full | Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism |
| title_fullStr | Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism |
| title_full_unstemmed | Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism |
| title_short | Power, Market and social system Complexity: Theoretical Model of Financial and Management Mechanism |
| title_sort | power market and social system complexity theoretical model of financial and management mechanism |
| topic | government expenditure wagner’s law ashby’s law of requisite variety sedov’s law of hierarchical compensation complexity |
| url | https://financetp.fa.ru/jour/article/view/1136 |
| work_keys_str_mv | AT evbalatsky powermarketandsocialsystemcomplexitytheoreticalmodeloffinancialandmanagementmechanism AT naekimova powermarketandsocialsystemcomplexitytheoreticalmodeloffinancialandmanagementmechanism |