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Monday, December 17, 2007

The Myth of Putin's Success

Writing in the International Herald Tribune (summarizing a longer essay to appear in the next issue of Foreign Affairs), Michael McFaul, a professor of political science and director of the Center on Democracy, Development, and the Rule of Law at Stanford University, and Kathryn Stoner-Weiss, associate director for research at the Center, expose the mythology of Vladimir Putin's "successful" rule over Russia:

Vladimir Putin's designation of Dmitri Medvedev as his preferred successor should be more than enough for Medvedev to win the March presidential election in Russia by a landslide. Not surprisingly, he has already pledged to continue his mentor's policies and suggested that Putin become prime minister to ensure his continued involvement in ruling Russia.

As far as most Russians are concerned, this is all to the good, since they give Putin high marks for restoring the Russian state and jump-starting the Russian economy.

According to the conventional narrative, under Boris Yeltsin in the 1990s, the Russian state did not govern, the economy shrank and the population suffered. Since 2000, under Putin, order has returned, the economy has flourished and the average Russian is living better than ever before. Putin may have rolled back democratic gains, the story goes, but these were necessary sacrifices on the altar of stability and growth.

But this conventional narrative is wrong, based almost entirely on a spurious correlation. The emergence of Russian democracy in the 1990s did indeed coincide with state breakdown and economic decline, but it did not cause either.

The reemergence of Russian autocracy under Putin, conversely, has coincided with tremendous economic growth but did not cause it. If anything, Putin's autocratic turn over the last several years has reduced gains from what they would have been had democracy survived.

The Russian state under Putin is certainly bigger than it was before, and in some spheres - such as paying pensions and government salaries on time, road building, or educational spending - it is doing better now than during the 1990s. Yet given the growth in its size and resources, what is striking is how poorly the Russian state still performs. In terms of public safety, health, corruption and the security of property rights, Russians are just as badly or actually worse off today than they were a decade ago.

The murder rate has increased under Putin. Health spending averaged only 6 percent of GDP from 2000 to 2005, compared with 6.4 percent from 1996 to 1999. Russia's population has been shrinking since 1990, thanks to decreasing fertility and increasing mortality rates, but the decline has worsened since 1998. At the end of the 1990s, annual alcohol consumption per adult was 10.7 liters; by 2004, this figure had increased to 14.5 liters. In short, the data simply do not support the popular notion that Putin's more autocratic state is also a more capable or effective state in addressing Russia's significant public policy challenges.

Nevertheless, supporters might respond, Putin's autocratic ways have at least paved the way for Russia's spectacular economic growth. Growth in Russia has indeed averaged an impressive 6.7 percent during Putin's tenure. Since 2000, real disposable income has increased by more than 10 percent a year, consumer spending has skyrocketed, unemployment has fallen, and poverty has decreased.

But this economic recovery is actually unexceptional compared to the rest of the post-communist world. The entire region experienced economic recession and then began to recover several years after the adoption of reforms. Russia's economy has followed this same general trajectory - and would have done so under dictatorship or democracy.

Putin arrived on the scene at a good time in Russia's economic cycle, and got even luckier as oil prices rose worldwide. Increasing authoritarianism inside Russia had nothing to do with the latter.

If there is any causal relationship between authoritarianism and economic growth in Russia, it is negative. Russia's more autocratic system in the last several years has produced more corruption and less secure property rights. Asset transfers have transformed a thriving private energy sector into one that is effectively state-dominated and less efficient. Re-nationlization has caused declines in the performance of formerly private companies, destroyed value in Russia's most profitable companies, and slowed investment, both foreign and domestic.

Perhaps the most telling evidence that Putin's autocracy has hurt rather than helped Russia's economy is provided by regional comparisons. Between 1999 and 2006, Russia ranked ninth out of the 15 post-Soviet countries in terms of average growth. Similarly, investment in Russia, at 18 percent of GDP, although stronger today than ever before, is well below the average for democracies in the region like Poland and Estonia.

One can only wonder how much faster Russia would have grown with a more democratic system. The strengthening of institutions of accountability - a real opposition party, genuinely independent media, a court system not beholden to Kremlin control - would have helped tame corruption and secure property rights and would thereby have encouraged more investment and growth. In short, to sustain Russian growth and rebuild the Russian state over the long haul, Medvedev needs to move past Putin's autocratic legacy rather than emulate it.


Snake Oil Baron said...

"Medvedev needs to move past Putin's autocratic legacy rather than emulate it."

Is there even a chance that that will happen? Is it at all possible that he will decide not to play the role of Putin's seat warmer and actually undo some of the damage that Putin has done?

Also, even with the damage that Putin has done, is there a chance that the oil wealth and his few successes in roads and such could provide enough of a shock absorbing effect that if Russia turns in the right direction in the next few years, it will not have lost all the ground it gained from ending the USSR?

Anonymous said...

As always, thank you La Russophobe for organizing germane content on Russia, from respected sources, that give us a voice about how Russia is developing; a voice that one cannot easily get at one web site.

I agree with Michael McFaul's notion that Putin's autocracy did NOT cause the current economic expansion in Russia. As usual, capital flows to those sectors most profitable. Russia's situation is being exploited by internal and external investment capital. Putin's role in a true capitalistic state should be to make society conducive for capitalism to operate within. His cut backs on democracy have nothing to do with the flow of capital; how does musseling the media and bank rolling the "Nashi" thug youth group, not to mention
Chechnya, help Gazprom build its new pipeline into Europe??? It doesn't!!!! Doesn't Putin's autocracy mirror the United States slide into fascism??? We have our
oligarchs in the west too...they are ExxonMobil, Dow Chemical, Haliberton. Putin is too "ham handed", we are "slicker", more devious here in the West. We are globally moving toward the "World Order", are we not???