Institutional Transformation in the Agricultural Sector of the former Soviet Bloc

This article discusses popular explanations for the demise of farm enterprises in Mongolia, such as: reduced state funding, corrupt and self-interested rural elites, and the (supposed) drastic central privatisation policy. It argues that these factors are insufficient to explain the collectives' demise, as they are largely true also for Russia, where no widespread break-up of farm enterprises took place. Farm enterprises in Russia, despite financial difficulties, show remarkable resilience as large-scale units. A tendency which can be observed in general, as well as in most of the regions bordering Mongolia with a similar type of (semi) - pastoralist livestock farming, Therefore, this article takes a look at the level of the Mongolian farm enterprise, and considers the socio-economic specifics of these enterprises to discover the incentives for employees and managers to disband (or leave) these enterprises. In doing so it pays attention to formal structures and informal social structures related to property and production, within a tentative comparison with Russia.