The work of transitional institutions is impossible unless economic agents can be confident that the state will fulfill its obligations and that the rules of the game do not depend on the whims of a particular leader. Statistics show that democracy protects investors from expropriation and from arbitrary changes better than dictatorships do, thereby bringing about increased economic growth.
Watching the drama of Russia’s private banks collapsing one by one naturally triggers fear: of more than 3,000 registered banks, about 2,600 have already lost their licenses. After the bailout of Otkritie and BIN, the government’s share in Russia’s banking system assets exceeds 80 percent. Fixing Russia’s banking system requires addressing the deep and systematic flaws in the central bank and the financial sector at large.
The Carnegie Moscow Center hosted a discussion on the changing global energy market at a time of abundant supply and high policy uncertainty, particularly in regards to American energy politics under the Trump administration.
Andrey Movchan explains what lessons Russia can learn from Mexico, the United Arab Emirates, and Venezuela to deal with the perennial “resource curse.”
Authors of more recent studies almost unanimously state that even though it’s unclear whether the resource curse generally menace on average over the group of resource-rich countries, it definitely threatens nations with weak institutions.
During a recent media call, Andrew Weiss and Andrey Movchan discussed the current stand of the Russian economy.
Carnegie Moscow Center hosted a discussion on the impact of resource dependency on the economic development of Russia and other major petrostates in a comparative context.
Having found itself in a lose-lose situation, the West will most probably do nothing—keeping sanctions in place and freezing the situation. The Kremlin will be happy. Russia won’t stop meddling in Ukraine or give up Crimea.
Russia faces bleak economic prospects for the next few years. It may be a case of managed decline in which the government appeases social and political demands by tapping the big reserves it accumulated during the boom years with oil and gas exports. But there is also a smaller possibility of a more serious economic breakdown or collapse.
The budget clearly illustrates its authors’ thinking. They fear popular discontent and so don’t want to risk taking unpopular steps. The regime’s main goal is short-term stability, so it keeps supporting the paternalistic governing model, which is increasingly trapped in the cycle of social spending.