A Normal Country

Andrei Shleifer and Daniel Treisman

From Foreign Affairs, March/April 2004

Summary:  Conventional wisdom in the West says that post-Cold War Russia has been a disastrous failure. The facts say otherwise. Aspects of Russia's performance over the last decade may have been disappointing, but the notion that the country has gone through an economic cataclysm and political relapse is wrong--more a comment on overblown expectations than on Russia's actual experience. Compared to other countries at a similar level of economic and political development, Russia looks more the norm than the exception.

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.

None of these predictions can be ruled out. But thinking about Russia as a normal middle-income country helps put extreme forecasts in perspective. Most countries in this category end up somewhere between textbook democracy and full-fledged authoritarianism. Their democracies are incomplete, unpredictable, and subject to temporary reversals as incumbents seek to manipulate the process to stay in power. When they grow at all, middle-income countries tend to grow in spurts that are often interrupted by financial crises. Russia has probably now destroyed enough of the vestiges of central planning to continue operating as a market economy, albeit with flawed institutions and an unhealthy dose of state intervention.

That Russia is only normal may be a disappointment to those who had hoped for more. And it is little consolation to those who have no choice but to endure the insecurities of life there. But for a country that was an "evil empire" as little as 15 years ago -- threatening people at home and abroad -- it is a remarkable and admirable achievement.