Putin's Russia: Is It a Doable Project?

Demokratizatsiya, Winter 2004 by Beliaev, Mikhail

Generally empirical investigations confirm that there are strong positive associations between political and economic liberalization and socio-economic performance. However, there is no consensus on the nature, shape, and conditionality of these links: Are they cases of endogeneity or a causal relationship? Are these relationships linear or not? Do they change their strength or direction over time or in certain circumstances? all these issues are debated.

One can safely assume that post-communist nations with favorable initial conditions had better chances to place themselves on the track of incremental liberalization in both economic and political terms. Those that did so have harvested better results in terms of economic growth, social security, etc. The most prominent examples are located in the northwestern part of the Eurasian post-communist space (Visegrad and Baltic nations, Slovenia).

The contemporary challenge to students of post-communist transformation is to address the ongoing developments in and elaborate on optimal policies for the countries that are less advanced in their transitions to democracy and a market-based economy and-more than a decade since the Berlin Wall collapsed-still stay in a point of bifurcation. The old question is raised again: Is the "strong hand" of a semi-authoritarian ruler necessary to alter the path of national development from, in terms of Wallance and Haerpfer (1998), the "Eastern transition path," that is, that of the CIS, to a more successful one?

One may have reasonable doubts as to whether or not there is an answer that applies in any circumstance, independent of a country's level of development, historical background, recently formed public attitudes, etc. In the absence of a consensus to the above question, Putin's Russia seems to have opted for the strategy of liberal economic reforms by a "strong hand," which controls the mass media and enjoys a high level of the electoral support. Can this strategy be the way out of the contraction of the 1990s?

Hypothesis and Operationalizations

If the combination of the Putin-style "strong hand" approach and liberal economic policies is an appropriate recipe for the economic revival of Russia, one can hypothesize that, other factors being equal, economic performance should be stronger in those Russian regions where governors have enjoyed a strong electoral mandate, the state has controlled the mass media, and the economies have been more liberalized.

Empirical Scope

This paper draws on the recent (1998-2001) empirical data from seventy-eight Russian regions. Autonomous districts are not included in the sample because they are parts of other regions and, thus, cannot constitute independent observations.11 War-torn Chechnya is not included because of the lack of the data and her questionable affiliation with the Russian Federation.

The empirical focus is on regional economic performance in 1999-2001-the period after the financial crisis of 1998. Because of the lack of some data for 2001 and the assumed one-year lag between the response variables and economic liberalization, employed predictors account for political and economic liberalization in 1998-2000.