Resource information
This paper analyzes land transactions
between municipalities and private businesses based on
official data and business surveys in 15 regions of the
Russian Federation. Since the Russian Federation passed the
new Land Code in 2001, land privatization has been
officially encouraged by the federal government and in
particular, land under previously privatized buildings was
supposed to be privatized to the owner at a nominal price.
The paper shows that many subnational authorities (which own
or control the vast majority of land of interest to
businesses) appear to use a combination of high statutory
land buy-out prices and administrative barriers to deter
land privatization and to offer "long-term leases"
(which are not fully marketable) instead. On the other hand,
regions that have established low buy-out prices and taken
steps to remove unnecessary administrative barriers to land
privatization appear to have higher rates of land ownership
by businesses, and to face lower levels of corruption in the
privatization process. The paper concludes that further
reductions in the statutory prices for privatization of land
under buildings and elimination of unnecessary
administrative barriers should help to encourage further
land privatization and the development of a competitive,
secondary market in commercial land.
