NGOs are the future, say some Russian economists. In Russia an NGO is what we used to call voluntary organizations or non-profit organizations—ranging from Boy Scouts, churches and Meals on Wheels to NAACP and NCAA. Originally, the term was used more narrowly for international aid agencies. Organizations such as the Red Cross gave assistance more or less impartially, while governments wanted to influence the host country=s foreign policy. As a result, NGOs acquired a good reputation (other than their willingness to cozy up to dictators who provided stability), while governments were suspected of trying to pursue national goals. Perhaps nowhere do NGOs have a higher reputation than in the former Soviet bloc, where until a decade ago almost every activity was government-inspired or directed.

What is strange about Russian NGOs is their continuity with the Soviet past. There is a fixation on cooperative ventures that can be found in America only among academics and Quakers. Even the funds to support the establishment of cooperatives comes from the government, and agencies actively work to recruit groups to participate. The agency magazines report a good many formal meetings, all described in the drearily traditional manner—photo of the participants, names, topic of discussion, and hopes for success. Not much on debate, on diverse opinions, on specifics about problems.

Even so, the very existence of these NGOs is a hopeful sign: people are being encouraged to act themselves, without looking over their shoulder for state approval; many of these activities cut across ethnic and linguistic lines, bringing together people who might otherwise just be sitting around in the coffee shops and bars complaining about the lack of opportunity and how the “other” groups get all the breaks.

Still, for an American this is a strange phenomenon. Where is the encouragement of individual initiative? The question gets less of an answer than a puzzled expression (which is far better than the cynical smile or a canned response). So the inquirer plunges ahead: loans, capital formation, contract law, permits and regulations. It is not a pretty picture. Anyone who has moveable property can get a loan, but you cannot mortgage your property. There are banks, but the bankers make big loans, not small ones to individuals who have little more than a good idea.

In short, if you are in one of the farming cooperatives that replaced the old collective farms, your chance of becoming a small farmer are slim: no land, no equipment, no loans (or only at 40% interest), no farm bureau experts, and not much encouragement from the people you left. If you want to start a restaurant, better save up lots of money, or, better, get a job as a manager at McDonald=s (which is doing very well apparently, to judge by the crowds). Not that becoming a farmer or small businessman is particularly easy in America. But here we have enough people starting up new businesses (often too underfunded to last until a customer base is built up) that bankruptcy is considered a learning situation rather than a fatal disease.

This daredevil optimism is lacking in Russia. Only those who have almost a 100% chance of success get a chance. And those lucky few have to fill out the same environmental impact forms and other paperwork that we do, hoping that some bureaucrat will see fit to approve the applications: “Pull” is still more significant than “Push.” Criminals find it easier to accumulate capital than ordinary citizens. (Just like home.)

Most of Russia is conservative and cautious—meaning reluctant to abandon the job security and predictability of the Soviet past and holding vivid memories of the economic failures of the Yeltsin reforms. NGOs are a third way, neither abandoning well-known practices nor relying on some distant central planner to get it right.

William Urban, Lee L. Morgan Professor at Monmouth College, spent three weeks in Russia this summer on a Global Partners program sponsored by the Mellon Foundation.