Putin's Russia

Gladys and Roland Harriman Professor of Comparative Economic Systems and Director, Center for Transition Economies, Columbia University

Michael McFaul and Kathryn Stoner-Weiss reply:

We do not claim that Russia today is the Soviet Union. We write, "Russians are richer today than ever before." Our article attempts to explain why. Contrary to Padma Desai's oversimplification of our analysis, we emphasized both the impact of rising oil and gas prices and the "important policy changes." But the policy changes that jump-started growth were undertaken before Putin came to power. Russia's real economic turnaround came after the financial meltdown in August 1998, which forced the Russian government to pursue prudent fiscal policies and a more rational exchange-rate policy. As a result of these reforms -- carried out by a left-of-center government headed by Yevgeny Primakov -- Russia's economy began to grow a year before Putin became prime minister and 18 months before he became president.

We did note that Putin implemented some important macroeconomic reforms, such as the 13 percent flat income tax, a reduction in the corporate tax, and the creation of a stabilization fund. But tracing the relative impact of these reforms, against the backdrop of the fundamental macroeconomic reforms before Putin and the rising oil and energy prices while he was president, is the harder analytic task for Putin apologists such as Desai, because there have been other real economic, social, and political costs associated with his rule. As we document in our article, Putin's transfer of the assets of the privately owned Yukos to the state-owned Rosneft destroyed hundreds of millions of dollars in value in the company and created a less profitable, less productive enterprise. And all independent measures show rising levels of corruption in Russia under Putin. The real question is not how well the Russian economy is growing now but how well it could be growing under a less autocratic form of government.

Desai writes about Putin's "authoritarian ways," but she also tries to defend his regime by recounting the flaws in Yeltsin's democracy and suggesting that we are not aware of Russia's 400,000 NGOs. But many of these NGOs, especially those working on anything considered to be remotely political, are being shut down, forced out of business by a restrictive new law, and their leaders are being imprisoned. In early March, Lev Ponomarev, a Russian colleague of ours in the NGO community, was arrested, along with others, for participating in a peaceful demonstration against the overmanaged "election" of Putin's successor, Dmitry Medvedev.

Regarding the Yeltsin era, we agree that the "oligarch"-owned media outlets might have become "mouthpieces of the special interests." However, one wonders what Desai would say about the oligarchs who own Fox News, CNN, The Wall Street Journal, The Washington Post, The Nation, The New York Times, or The Weekly Standard. And even if a totalitarian dictatorship had run Russia in the 1990s (it did not), how would that justify Putin's "authoritarian ways" today?

Finally, we disagree with Desai's assertion that we have created a straw man in recounting that some argue that it was Putin's regime that helped produce economic growth and better governance in Russia. The evidence to the contrary is far too substantial. Both the Russian and the Western media are filled with accounts of how Putin's strong hand spurred growth. Time magazine named Putin its Person of the Year, in part based on this logic. And inside Russia, public opinion polls confirm that a majority of people have accepted the alleged tradeoff between less political freedom and more wealth. President-elect Medvedev based his campaign on maintaining Putin's "strong" state and economic success. Maybe Desai can afford to ignore all this. But judging from the overwhelming reaction to our article, including from Putin himself, it appears that we are arguing against not a straw man but a strongman.