The Russian economic puzzle: going forwards, backwards or sideways?

• Published in: International affairs (London) Vol. 83; no. 5; pp. 869 - 889
• Main Author: HANSON, PHILIP
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01-09-2007; Blackwell Publishers; Oxford University Press
• Subjects: Business structures; Economic Development; Economic growth; Economic management; Economic Policy; Economics; Energy economics; Fossil fuels; Gross domestic product; International economics; International political economy; International relations; Oil companies; Oil industry; Oil prices; Petroleum; Political economy; Political power; Post-communist societies; Regression analysis; Resource economics; Russia; Russian Federation; Statism; Sustainable Development; Transition economies; Russia
• ISSN: 0020-5850; 1468-2346
• DOI: 10.1111/j.1468-2346.2007.00660.x

The Russian economic puzzle: going forwards, backwards or sideways? The question addressed in this article is whether the recent strong growth of the Russian economy is sustainable. The main difficulty is assessing the conflicting evidence. Developments since the financial crisis of 1998 are reviewed, including growth performance and macro-economic management. There is an analysis of the nature and extent of Russian economic dependence on exports of oil and gas and the direction towards state control since 2003 is described. The article reviews the interaction of competitive power politics among the political elite with economic policy and assesses factors favouring and factors working against continued rapid growth over the next five years. One conclusion is that informal rules operating in the economy differ across sectors, and Russian economic development is in part robust; but there are powerful influences working towards a slowdown in growth.