#12 - JRL 8082 - JRL Home
From: "Steven Halliwell" <shalliwell@rivercapital.com>
Subject: Comment on Shleifer Triesman/ 8078
Date: Tue, 24 Feb 2004

Steve Halliwell
CEO, River Capital International Group LLC, a private equity fund manager in New York.

Shleifer/Triesman (JRL 8078) have made the strongest possible case for Russia as a “normal” developing country, subject to the usual weaknesses and abuses. The analysis is not responsive, however, to the question that has been running through various JRL comments since the publication of the Gomstyn and Gessen articles in JRL 8045.

Put most simply, the question is whether the autocratic history of the Russian state is once again overwhelming the earnest desire of the population for an open political system and a civil society. In order for democracy to work, there has to be a constituency that believes that an open system is crucial to that group’s survival and future prosperity. Without such a social force, a ruler in Russia -- no matter how high-minded or dedicated to political reform ­ has no base from which to resist the pressures of predation from the vast army of state-associated interests.

Shleifer and Triesman are not looking at that question directly in their essay. But their analysis assumes continued economic growth and the reduction over time of political abuses ­ all part of becoming a developed nation. The long curve in Russia’s political process seems to point, however, more toward a cyclical crisis at the top, not gradual progress. Alexander Akhiezer’s essay in Neprikosnovennyie zapasy (see Mischa Grabowitz in JRL 8056 for link to this interesting journal) points out that twice in the twentieth century the Russian state has collapsed of its own dead weight, without defenders ­ once under Nicholas II and again under Gorbachev. Is Putin trapped in the same “black hole,” where the inertia of the past sucks the energy of the progressive forces inward, until the state again collapses like a dying star?

If Sheifer and Triesman could point to real economic reform and renewal in the Russian provinces, it might suggest that the old pattern was being broken, and the basis being created for an industrial owners/commercial class that would demand representation at the center. Instead we see continued hypercentralism, riding on the economic gift of high oil export revenues. That is not a reassuring situation for foreign investors, nor does it bode well for the “normalcy” of Russia’s political transition.