战略与国际研究中心-PONARS-Policy-Memo-114_5页_78kb

Summary of "Consolidation of the Russian State and Economic Policy Scenarios Under Putin"

Core Content

This policy memo, authored by Vadim Radaev in April 2000, analyzes the trajectory of Russian political and economic reforms under Vladimir Putin, following the two earlier stages of liberalization and institutional change. It outlines various policy alternatives and evaluates their potential implementation, focusing on the interplay between state consolidation and economic policy decisions.

Main Stages of Reform

• First Stage (1985–1991): Political liberalization under Gorbachev, which led to the collapse of the Soviet Union and a severe political crisis.
• Second Stage (1992–1998): Economic liberalization under Yeltsin, marked by price liberalization, privatization, and financial stabilization efforts, culminating in the 1998 financial crisis.
• Third Stage (Present): Institutional consolidation under Putin, with a focus on strengthening the state apparatus and reorienting economic policy.

Key Policy Alternatives and Their Implications

1. Nationalization of Property vs. Establishing State Control

• Nationalization: Often seen as risky and potentially detrimental to investment climate.
• State Control: More effective through management changes and indirect control over major companies, reducing the need for formal nationalization.

2. Effective Management vs. Privatization of State-Owned Property

• Privatization: Faces strong opposition due to past failures, such as the Svyazinvest case.
• Management Improvement: Seen as a more viable path, with a trend toward extending the list of strategic enterprises not subject to privatization.

3. Combating Corruption vs. Administrative Restructuring

• Anti-Corruption Campaigns: Politically popular but often superficial.
• Administrative Reform: Includes reducing administrative restrictions, improving legislation to limit official intervention, and centralizing surveillance functions. Seen as more effective but less favored by political leaders.

4. Commercialization vs. Monopolization of Protection Services

• Commercialization: Encourages competition among security agencies.
• Monopolization: Expected to gain more influence, as state security agencies are strengthened and increasingly centralize control over protection services.

5. Monetary Consolidation vs. Printing Money

• Monetary Consolidation: Aims to reduce reliance on money substitutes and improve control over the monetary system.
• Printing Money: Despite inflation concerns, is still advocated due to the power it provides, though the real issue is control over means of payment.

6. Increasing Debts vs. Collecting Taxes

• Borrowing: A short-term solution, though risky due to the potential for new financial crises.
• Tax Collection: A long-term necessity, but difficult due to systemic inefficiencies and leakage. Requires significant changes in the taxation system.

7. Maintaining the Tax Burden vs. Decreasing Tax Rates

• Maintaining the System: Involves political pressure on large debtors and selective control over economic agents.
• Tax Reform: Includes lowering tax rates, limiting the number of taxes, and stricter enforcement. Current policy shows mixed results with some taxes reduced and others unchanged.

8. Giving Subsidies vs. Creating Guarantees for Investors

• Direct Subsidies: Traditional method, but inefficient and politically advantageous for state officials.
• Investor Guarantees: More efficient but less favored due to the power it shifts from state distributors to private actors.

9. Open Market vs. Support of Domestic Producers

• Open Market: Encourages foreign investment and exports.
• Protectionism: Likely preferred by the new government, through import tariffs, state orders, and exchange rate control to boost domestic industries.

10. Raising Social Assistance vs. Restructuring of Social Transfers

• Raising Assistance: Politically popular but unsustainable due to budget constraints.
• Restructuring: Necessary for long-term stability, involving better targeting of aid and tapping into private resources like pensions and insurance.

Conclusion

The memo emphasizes that the third stage of reform under Putin is centered on institutional consolidation, which is more crucial than economic liberalization. It highlights the tension between maintaining state control and implementing market-oriented reforms, and the role of political narratives in shaping public perception and policy direction. The Russian state is increasingly focused on managing internal challenges and consolidating its power rather than pursuing open, transparent economic policies.