Economic Mechanisms Alternative to the State Control: Perspectives of Application

Abstract

A reform of the state control is one of the eleven national priority projects in Russia and the only priority project aimed at improving government effectiveness. Most of the reform's efforts traditionally focus on improving effectiveness and efficiency of the state control while the opportunities for using alternative mechanisms are largely neglected. Meanwhile, there is a broad range of possible alternatives to the state control and supervision activities, and they could be used for reducing risks and protecting public values and interests in various areas. The paper reviews the key types of mechanisms used as alternatives to the state control in the OECD countries. Basing on sociological surveys, the author analyses a possible perception of such a replacement of the state supervision with alternative non-governmental mechanisms on the part of the business society. This analysis allows to formulate the key conditions for using non-governmental mechanisms as a partial or complete alternative to the state control. Firstly, the nature of risks should be considered: violations of the legislation should not inevitably and promptly lead to a damage which cannot be reimbursed. Secondly, sufficient development of nongovernmental institutes should be ensured in order for them to take on the control functions along with the accountability for the achieved results. Thirdly, reallocation of the risk-related costs from the budget (taxpayers at large) to the consumers of specific sectors should be justified. It is noteworthy that the introduction of the non-governmental mechanisms should not generate significant additional administrative costs. Finally, alternative mechanisms should be used in the areas where the state control proves ineffective and inefficient.