Foreign Affairs

Foreign Affairs

March/April 2004

 

A Normal Country
By Andrei Shleifer and Daniel Treisman

 

Rethinking Russia

During the last 15 years, Russia has undergone an extraordinary transformation. It has changed from a communist dictatorship to a multiparty democracy in which officials are chosen in regular elections. Its centrally planned economy has been reshaped into a capitalist order based on markets and private property. Its army has withdrawn peacefully from both eastern Europe and the other former Soviet republics, allowing the latter to become independent countries. In place of a belligerent adversary with thousands of nuclear missiles pointed at it, the West finds a partner ready to cooperate on disarmament, fighting terrorism, and containing civil wars.

Russia's reinvention would seem cause for celebration. Twenty years ago, only the most naive idealist could have imagined such a metamorphosis. Yet the mood among Western observers has been anything but celebratory. Russia has come to be viewed as a disastrous failure and the 1990s as a decade of catastrophe for its people. Journalists, politicians, and academics have described Russia not as a middle-income country struggling to overcome its communist past and find its place in the world, but as a collapsed state inhabited by criminals and threatening other countries with multiple contagions.

As the 1990s drew to a close, the left and the right in the United States were united in this view. To Republican Dick Armey, then House majority leader, Russia had by 1999 become "a looted and bankrupt zone of nuclearized anarchy." To his colleague, House banking committee chairman James Leach, Russia was "the world's most virulent kleptocracy," more corrupt even than Mobutu Sese Seko's Zaire. From the left, Bernard Sanders, the socialist member of Congress from Vermont, described Russia's economic performance in the 1990s as a "tragedy of historic proportions." A decade of reform had earned the country only "economic collapse," "mass unemployment," and "grinding poverty."

More recently, a glimmer of optimism briefly broke through the gloom. As the economy grew rapidly and a young, disciplined president replaced the ailing Boris Yeltsin, some saw hints of an emerging stability in Russia. President George W. Bush, in late 2003, praised President Vladimir Putin's efforts to make Russia into a "country in which democracy and freedom and the rule of law thrive." But the happy talk did not last long. When Russian prosecutors arrested the oil tycoon Mikhail Khodorkovsky in October 2003, threw him in jail, and froze his shares, the critics' worst fears of an authoritarian revanche seemed to be coming true. Russia, according to the New York Times columnist William Safire, was now ruled by a "power-hungry mafia" of former KGB and military officers, who had grabbed "the nation by the throat." When the pro-Putin United Russia Party was announced to have won more than 37 percent of the vote in the December 2003 parliamentary elections, Safire lamented the return of "one-party rule to Russia" and declared the country's ...

 

Andrei Shleifer is Whipple V.N. Jones Professor of Economics at Harvard University. Daniel Treisman is Associate Professor of Political Science at the University of California, Los Angeles. For full references and data sources see http://papers.nber.org/papers/w10057.