Government Failures in The Implementation of Effective Contracts

The paper examines the results of reforms in the remuneration system of university lecturers. Two stages of the transformation process have been considered: the transition to the new remuneration system in 2008 and the introduction of effective contracts in 2012. The paper explains how the political and bureaucratic mechanisms of the formation of the remuneration system have changed. We have made an attempt to describe the government failures in the implementation of effective contracts. It is assumed that the new mechanism remains over-regulated and is based on the idea of the local nature of the academic labor market. The imitation regulation is considered to be one of the most important reasons of the state failures. On the one hand, the government manifested the establishment of understandable and achievable indicators, on the other hand, the authorities failed to solve real problems of the production and transfer of the new knowledge. Governmental stakeholders in education are interested in maintaining and further expanding of their functions. Meanwhile, insufficient professionalism in decision-making and short-termism become the reasons for inefficient waste of budgetary resources for the indicators production and elaboration of various of insurance procedures. The study shows that for many universities the achievement of the target salary level is associated with serious difficulties. There are also significant differences in remuneration systems between universities. Interregional differences in the level of wages of university staff create different conditions for investment in the human capital of university lecturers and incentives for interregional staff turnover that weakens the resource potential of universities in a number of regions.