Political Response to the Crisis: The Case of Russia
Authors argue how Russia has politically reacted to the crisis. As compared to other Central and Eastern European transition economies, Russia experienced an extremely steep decline of its GDP (about 8% in 2009) during the global financial crisis but managed to maintain and even increase living standards. However, unlike CEE countries, in 2013, Russia already faced a new economic slowdown and entered recession in 2014–2016 after the acceleration of geopolitical tensions with the West within the context of the Ukrainian crisis. In this chapter the authors will show the reasons for the economic slowdown in 2013, including key features of the Russian model of economic development in the 2000s, its crash during the 2008–2009 global financial crisis, and the failed attempts to change the model in 2009–2011. Their analysis is based on the limited access order (LAO) framework formulated by North et al. (2009; 2013). They try to explain the instability of Russian economic growth as the unpreparedness of dominant groups within the ruling elite to restrain their own ambitions and take into account the interests of other players. They also analyze the role of key elite groups (the oligarchs, federal bureaucracy, and siloviki) during every stage of development as well as the role of new elite groups that have also evolved within that system, including the regional bureaucracy, successful medium-sized businesses, and public sector elites. Taking into account political constraints, the authors argue the key drivers and main risks of economic development in Russia. Finally, they discuss conditions for transition to a new model of economic development.