believed that consolidation would occur spontaneously as the investment funds, acquiring vouchers from employees, would use them to gain sufficient blocs in privatized enterprises. The table below shows limited evidence of that happening in the past five years-mainly attributable to the increasing acquisitions by Russian holding companies and industrial groups after 1994.

Even in those enterprises in which management-held shares are nominally in the minority, managers have at their disposal a variety of techniques by which their _de facto_ control exceeds their nominal share ownership. Where "outsider" shareholders were fragmented, control was effectively ceded to managers. Employees were the largest category of shareholder in most enterprise put through the MPP, yet many of their shares are non-voting. In addition, managers have often taken to imposing (illegally) bans on the selling of shares to outsiders, placing limits on share ownership, and using implicit threats (dismissal, wage cuts, limitations on access to social assets) on workers who violate these rules. Faced with the prospect of takeovers, managers typically issued new shares (also often illegally) in order to dilute the power of outsiders.

Table **1:** Estimates of Ownership in Russian Enterprises, **1994-199913** (% of Share Capital)

||_1994_|_1995_|_1996_|_1997_|_19991_|
|---|---|---|---|---|---|
|_Employees_|44-56|39-49|26-43|23-40|36|
|_Managers_|9-17|10-17|12-18|12-36|15|
|_Domestic Legal_<br>_Entities_<sup>_2_</sup>|711|20-23|23-25|22-24|23|
|_Domestic_<br>_Individuals_|3-6|9-11|8-12|11-13|16|
|_Foreign Owners_|1-2|1-2|1-2|4-5|8|
|_StateAgencies_|12-20|11-13|9-11|7-14|3|

1. No survey undertaken in 1998.

_2._ Includes investment funds, all other firms (including holding companies and financial-industrial groups), and banks.

private investment funds. Similar critique by the same author is mentioned in John Nellis, "Time to Rethink Privatization," _Finance and Development_ 36, 2 (1999): 16-19.

13 Estimates vary considerably depending on when, during the course of the year, the survey was taken, and on the sample size. Figure ranges are taken from the following: for 1994, Blasi and Shleifer, "Corporate Governance in Russia," Radygin, "The Russian Model of Mass Privatization: Governmental Policy and First Results," in _Privatization, Conversion, and Enterprise Reform in Russia_ (Boulder, Col.: Westview, 1995); for 1995, Blasi, "Corporate Ownership and Corporate Governance in the Russian Federation," in Ira Liebermjan, Stilpon Nestor, and Raj Desai, eds. _Between State and Market: Mass Privatization in Transition Economies_ (Washington, D.C./Paris: World Bank/OECD, 1997), Radygin, "Securities Market Development and its Relationship to Corporate Governance," paper presented at OECD conference on Capital Markets, 1996; for 1996: Blasi _et al, Kremlin Capitalism: Privatizing the Russian Economy_ (Ithaca, N.Y.: Cornell University Press, 1997), Radygin, S. Aukutsionek, _et al.,_ "Dominant Shareholders and Performance of Industrial Enterprises," _Russian Economic Barometer 1_ (1998): 8-41, Institute for Economies in Transition, _Annual Report 1996_ (Moscow: IET Press, 1996); for 1997: Simeon Djankov, "Business as Unusual," World Bank, 1998; data from IET; 1999 figures are from Radygin, "Ownership and Control of Russian Industry." 6