[MUSIC] As I already mentioned, many people in Russia were not experienced enough for playing the role of customers in the free market economy. And this lack of experience caused the lack of a really effective mechanism of free market and the free competition mechanism within the Russian economy. So what was the reaction of the state? Sometimes the people were suggested bad goods and bad services. Sometimes it was like a criminal approach to making very close to illegal actions. And the state reacted traditionally in one manner. The state organs, I would say, the executive and the legislative tried to compensate this lack of free market mechanism with the state interference, with the state control, with administrative control over the entrepreneurs. And this led to establishing and even to developing the system of administrative control and sometimes administrative barriers to the development of economic entrepreneurship. The state tried to fight for public interests and did not trust that consumers themselves could play this role in the free market because they saw that the customers could not play this role. The state tried to protect people. This kind of paternalism inherited from the Soviet tradition is a very important trait of the Russian regulation of economics. But the state developed this approach because they tried to take the responsibility in front of the people to protect their interest. And the social expectations from the state were also that the state will control entrepreneurs and the state will care about public interests, rather than the consumers themselves. The state developed control in specific fields of administrative control. The sanitary or firefighting fields were traditionally a field of state control, even in the Soviet state. But later, in years 2000s, it was the application of new system of controls. For example, the personal data protection, which appeared in the Russian legislation only in 2006, was supported not by the private actions in courts, but through the administrative control of state authorities. And, of course, the measures of this control were like those which were, Typical for any administrative control. And it was the examination of the activity of entrepreneurs. It was the special forms and special reports of the entrepreneurs to officials, to authorities which had these powers. And, of course, the use of some coercion, like paying fines for breach of the formal procedure of reporting about the use of personal data or about the collection of personal data as a general system of administrative control. So in general, we see that these administrative barriers became one of the very important characteristic of Russian style of economic development. And the state realized that this is a problem for economic development in general. And trying in abstract to fight, to plan measures of decreasing the [COUGH] administrative barriers. Administrative barriers were analyzed during the course of administrative reform. And administrative reform tried to overstep the practice of more and more administrative control over entrepreneurs. It was a matter for public discussions that so many public authorities have powers to control over entrepreneurs. But the state, only in very few cases, decided to abolish this or that system of control. One of the most remarkable example of the abolishing administrative barriers was the abolition of giving licenses for some types of entrepreneur activities like the construction, the building activity. The entrepreneurs, since 2009, did not need to get the special license. Though the building as a procedure itself was still, and is still, under the control when the state authorities examine the project of the building. And the state commission examines the results of the construction, and decides if the project is realized completely. So it is the system which was conserved, but one element of this system was abolished. In other fields, also the system of giving licenses as a form of administrative control was also abolished. And the least of those types of entrepreneurs' activity, which required to get license, was shortened since 1990s in many, many times. In the beginning of 1990s, more than 1,000 kinds of economic activity required the licenses, including, by the way, the legal practice. But today we have less than 60 kinds of economic activity which still require to get the licenses. And this is quite a big step forward of abolishing these administrative barriers for starting entrepreneur practice or for future developing of business. And this could be an example of, The practice when the state tries to overcome the obvious problem in regulation and in realization of the basic principles of the constitution. But going back to the motives, why the state established this? It was the care about public safety. It was the care about public interests. And on this road the state has no, firstly, legal limits. So the balance between those legal values which are protected and which are touched with the practice of establishing new administrative control, is always in favor of establishing new system of control. If we try to analyze the balance in-between the care about public safety and maybe the right to run the economic activity, the public safety always will have priority. And there is no maximum level of protection of public safety. The public safety is that global social interest which has no limits at all. And there could not be too much care about public safety. So basing on these ideas, the state sometimes establish new, more stiff requirements to economic activity and new system of administrative control over entrepreneurs. In the final wave, they argue that they more and more protect public safety, public interests. And they just limit some entrepreneurs' rights. These entrepreneurs' rights, in the society, are not so much valued as the public safety. And the state, in this balancing, is usually in favor of protection of public safety through establishing new and more administrative barriers. So finally, we see this two-way development. On one hand the state trying to develop economy and trying to step over the practice of administrative barriers for this development. And on the other hand, we see that the state still so cares about the public safety protection that administrative barriers are still very on agenda.
