Enterprise Hall, 318
October 23, 2008, 08:00 PM to 07:00 PM
This dissertation traces the evolution of Russia’s political and economic institutions since the early 1990s. Early reformers argued that Russia has successfully put in place a market economy with market liberalization and democratic elections after the collapse of the Soviet Union. I argue that it was not a market economy that appeared on the ruins of the Soviet empire rather, a state capture system riddled with institutional deficiencies emerged. The institutional weakness of the country was eventually exposed in the 1998 financial crisis when the state capture system collapsed. In its place, under the leadership of Vladimir Putin, a state capitalism system was put into place, with Russia once again missing out on a chance to move closer to establishing a functional democratic market economy. I trace Russia’s transition utilizing the tools of public choice and institutional economics, developing important linkages between democratic governance and market economies often mistakenly discarded as non-existent. Russia went from one form of political economy damaging to growth and development (state capture) to another (state capitalism) in less than two decades. Market economy remained a missing link in this transition. However, I propose that just as state capture proved unsustainable in the 1990s, so is state capitalism today. What will be the next step in Russia’s development? Will a market economy come to replace state capitalism or will Russia move further into authoritarianism? The dissertation concludes by addressing these issues.