#5 - JRL 8088 - JRL Home
From: "Ed Dolan" <dolan@alumni.indiana.edu>
Subject: Normal or Not?
Date: Wed, 25 Feb 2004
Normal or Not?
When I first started teaching in Moscow, at the end of the perestroika era, I sometimes got into conversations with students and colleagues about what they hoped for as the end product of reforms. Most often they answered that they hoped for Russia to become a "normal" country. Andrei Shleifer and Daniel Treisman (JRL 8078) argue that this is just what Russia has now become--yet I wonder if what has developed is quite the kind of normalcy that my Russian friends of the time, and I as well, hoped for.
Shleifer and Treisman make some valid points, of course. As they correctly point out, when one does the numbers for all transition economies on indicators like GDP decline and recovery, cumulative inflation, change in income inequality, or currency instability, Russia comes out near the middle of the group--near the norm, one might say. Similarly, if one broadens the comparison group to all emerging market economies, and adds political as well as economic indicators, one finds countries with both wiser and more foolish economic policies, both more and less press freedom, both more and less blatant rigging of elections, and both more and less concern with social issues like public health and education. In those ways as well, Russia would appear to lie no more than a plausible statistical distance from the norm. Russia is closer to the extreme on some indicators--weak FDI inflows, high perceived corruption, rapid spread of AIDS--but perhaps we should allow for the fact that it is also normal for each country to have a few smudges on the otherwise bright canvas of its accomplishments.
But is this really all that once was hoped for--that Russia should become a statistically typical third world country? I think not. I think that defining "normal" in this way represents a significant lowering of the bar relative to the hopes that were stimulated by the first tentative moves toward reforms at the end of the Soviet period, and also relative to the evident aspirations of the Russian leadership today.
It is apparent that the Russian leadership aspires to a role in the world more exalted than that played by a Mexico or a Thailand. Instead, they want Russia to be accepted as a co-equal member of the "Group of Eight" along with the US, the UK, France, Germany, Italy, Canada, and Japan. How far is Russia from the norm of the G7? GDP per capita among the G7 is tightly grouped around a level some three times higher than that of the aspiring eighth member of the club. The median ranking on Transparency International's corruption perception index is 18 for the G7 versus 86 for Russia. (Even Italy, perceived as the most corrupt of the G7, ranks 35--a big gap for Russia to close, notwithstanding Shleifer and Treisman's efforts to equate Berlusconi with Chernomyrdin.) By the G7 standard--a standard accepted by the Russian leadership itself--Russia is not yet a normal country, not even close.
Then there is the troublesome matter of Russia's still considerable military power and the uses to which it is put. No matter what excuses one makes about Argentina's claims to the Falklands, Turkey's troops in Cyprus, or India's nuclear weapons, Russia is not a normal country in its possession of, aspirations to, and projection of military power. As long as Russia combines a heavyweight nuclear threat with an attitude toward democracy, human rights, and the territorial integrity of its neighbors that can at best be characterized as near the median for the third world, we cannot accept the situation as normal.
When it comes right down to it, there are two different meanings of "normal." If we accept normal as meaning "no more than one standard deviation from the center of the bell curve," then Shleifer and Treisman are right, Russia is in many respects normal. But if what we mean by normal is "things being the way they ought to be" it is harder to make Russia fit. Those who, back in the 80s, hoped that Russia would become normal in the latter sense have, sadly, not yet seen their hopes fulfilled.