Stephen K. Wegren

Abstract

During the past two years, Russia has adopted two significant pieces of land legislation. In the fall of 2001, the long-awaited Land Code was finally approved by both chambers and signed into law. In mid-2002, a law on the turnover of agricultural land was approved and signed by President Putin. These legislative acts were much anticipated and were expected to expose the rural sector to true transformative processes by placing land relations on a market basis. In the aftermath of the adoption of these long-awaited laws, the critical question is: will these new laws unleash the "miracle of the market"? The answer, at least in the opinion of this paper is no. There is very little "free market" economics in these laws, and very much state regulation. The purpose of this paper is to present a short history of each piece of legislation, and then analyze some of the most salient points about each.

Overall, the study concludes that the two pieces of legislation represent conservative approaches to land reform. Although the principles and rights that each law entails were fought over for many years, the results are disappointing if one expected market economics to be the guiding principle. The Land Code is a bland document which fails to break new ground in any significant way. The law on the turnover of agricultural land is even worse because it is a conceptually flawed document. It stultifies market forces by making local governments the intermediary. The obligatory involvement of local governments brings the inherent inefficiencies of bureaucracies and the complexities of their processes, a cumbersome sales procedure, and exposes the entire process to abuse and corruption.