united in their common struggle to bargain for lower production quotas.<sup>8</sup> Consequently workers made no claims against property rights distinct from managers. Together, workers and managers constituted a pressure group, which dedicated itself towards ensuring that enterprise insiders received the numerous privileges that ultimately, made their way into the Russian MPP. As Gaidar himself later conceded, "Beginning in May and June [of 1992] it was impossible to stand up to the pressure of the industrial lobby."<sup>9</sup> Thus it is that the designers of the Russian MPP confronted the following political reality: pre-existing institutional arrangements that distort free markets cannot be wiped clean by governmental fiat.

The scope and results of the MPP are well known and require little summary. A central difference between the MPP in Russia and similar programs in the Czech and Slovak Federal Republic and in Poland was in the tradability of Russian vouchers. Under the three variants of the Russian program, insiders could purchase up to _51%_ of enterprise shares. The tradability of vouchers, on the other hand, allowed insiders to purchase additional shares-65% on average.'<sup>0</sup> Tradable vouchers, then, may have turned out to be an instrument of insider control, rather than the intended means of consolidating outsider ownership.

Despite conflicting evidence on managerial turnover in thle past year, there is general agreement that managers and salaried employees continue to hold approximately 50-60% of shares in privatized enterprises." Estimates of ownership structure have varied across different enterprise surveys, which are difficult to compare over time. We present estimate ranges for stock ownership in privatized Russian enterprises below. It is interesting to note that the greatest variation tends to be for empLoyees and managers as owners, perhaps reflecting the empirical (as well as theoretical) difficulties in separating the two.

Nevertheless, one of the critical shortcomings of the Russian MPP is that it did not enable an institutional concentration of ownership through fiLnancial intermediaries such as investment funds (as did the Czech and Polish programs) 2. The designers 8 See, e.g., John Willerton, _Patronage and Politics in the USSR_ (Cambridge: Cambridge University Press, 1992); Michael McFaul, "Russian Centrism and Revolutionary Transformation," _Post-Soviet Affairs 9_ (1993).

9 "Gaidar v. Gaidar," _New Times_ 17 (April 1993), p. 18. The "industrial lobby," in Gaidar's re-telling, consisted of the Russian Union of Industrialists and Entrepreneurs, its political affiliate the Civic Union, the Russian Assembly of Social Partnership (an umbrella trade union), and most importantly, the legislators in the Congress of People's Deputies.

10 Joseph Blasi and Andrei Shleifer, "Corporate Governance in Russia: an Initial Look," in Roman Frydman, _et al.,_ eds., _Corporate Governance in Central Europe and Russia_ (London: CEU Press, 1996).

11 Alexander Radygin, "Ownership and Control of Russian Industry," paper presented at the OECD-USAID Conference on Corporate Governance in Russia, Moscow, May 31-June 2, 1999.

12 A critique (by one of the authors of this paper) of the Russian MPP that did not enable an institutional concentration of ownership through financial intermediaries such as investment funds can be found in: Goldberg, I., G. Jedrzejczak, and M. Fuchs, The "IPO-PLUS" A New Approach to Privatization, Policy Research Working Paper 1821, The World Bank, Washington, D.C., Augusil 1997. This paper presents an alternative model of privatization, whose feature is a built-in mechanism of initial share concentration in 5