How Putin's autocracy undercut Russia's economy and chances for democracy During his nearly twenty years at the center of Russian political power, Vladimir Putin has transformed the vast country in many ways, not all of them for the better. The near-chaos of the early post-Soviet years has been replaced by an increasingly rigid authoritarianism, resembling a hard-fisted monarchy more than the previous communist dictatorship. Putin's early years in power saw rapid economic growth, averaging nearly 7 percent annually, and the rise of Moscow as a vibrant European-style city. But a slowdown during the second half of Putin's administration, since 2009, has resulted in the stagnation of the economy, especially in the hinterlands, with few signs of a possible turnaround. What accounted for these changes in Russia? Sergey Aleksashenko, a former top Russian finance official and then private businessman, lays the blame squarely on Putin himself, even more than external factors such as the sharp fall in oil prices or Western sanctions after Russia's annexation of Crimea in 2014. In his relentless drive to consolidate power in his own hands, Aleksashenko writes, Putin has destroyed the very idea of competition for political power. He has done so by systematically undercutting basic political institutions of the post-Soviet Russian state, including independent power centers such as the parliament, the judiciary, and a free media. In the economic realm, Putin effectively undermined Russia's still-emerging and very fragile system for protecting property rights-the basis of all economic activity. This in turn caused a sharp decline in private investment and thus contributed to the long-term economic slowdown. One result of Putin's rule was the destruction of the emerging checks and balances system in Russia, and that would be a major problem for Russia if and when it decides to become a "normal" democratic country based on Western values. In describing how all this happened, Aleksashenko's book offers universal lessons in the necessity of checks and balances in any political system-as well as in the importance of vibrant political institutions for economic growth.
Sergey Aleksashenko is a nonresident senior fellow at the Brookings Institution. In the 1990s he was in public service in Russia, serving as deputy minister of finance and first deputy governor of the Central Bank of Russia. Afterward he spent ten years in Russian and international business. Since 2008 he has been in academia. His previous book, The Battle for the Rubble, gives an insider's view of 1998 financial crisis in Russia.
Preface and Acknowledgments Chronology of Putin's Russia 1. Economic Roller Coaster: 2000-17 Rise and Decline of Growth Rates The Lost Decade 2. Transformation Derailed The Gradual Opening of Russia Removing Allies Winner Takes All Put Yourself in Putin's Shoes 3. The Key Element of Control Enemy Number One: The Media Tycoon Too Dangerous to Have Such a Friend New Fears There Is No Him without Cronies Self-Censorship Attack on the Runet A Tried and True Tool Just Business Sovereign Internet 4. A Unifying System of Power Building from Scratch Checks and Balances A Major Threat Getting Off the Political Stage The Court Says "Stop!" Dotting the i's Everybody Is under Control Deceptive Concession Financial Leash 5. Just a Dream There Was No Need First Rollbacks Judicial Hierarchy A Furtive Plan The Other Side of the Coin Demolishing the Pillars Under the Kremlin's Control No One Is Immune Relying on Parliament Rule by Telephone An Overactive Justice The Second Advent Humiliation A Creative Justice The Purge An Irremovable Justice An Unwanted Institution Was There a Reason? Purge at the Top 6. Preventing Competition Cohabitation Was Possible From Hatred to Friendship Bureaucracy Subdues Politicians Control over the Duma The Oligarchs' Revenge: Fear of the Past No Space for Opposition to His Majesty The Upper Chamber Has Not Been Forgotten Indiscreet Desire Prokhorov's Comet No Right to Be Elected An Unexpected Occurrence Forget It-The Thaw Has Ended! Absolute Dominance There Is No Room for Coincidence 7. Risky Business Carrying Out the President's Orders Gray Whales Are to Be Loved Pushed Out in a Friendly Way A Story with a Happy Ending . . . . . . And Then Putin Called When Partners Can't Agree We Are Just Returning What Has Been Privatized Abiding by the Law No Way but to Sell Walking a Tightrope But One Claw Snagged, the Bird Is Bagged You Cannot Hide behind Property Papers! 8. Nothing Personal, Just Your Business 9. Looking Forward Index
Sergey Aleksashenko has written a truly compelling account of the relationship between politics and economic development in Russia over the last thirty years. Jumping eloquently from statistical analysis to detailed qualitative case studies about renationalization, Aleksashenko shows convincingly that Putin's autocracy has not driven economic growth, but just the opposite. Putin's Counterrevolution will have a very long shelf life!" - Michael McFaul, U.S. ambassador to Russia (2012-14) "[A] detailed and insightful study of Putin's rise and seizure of economic and political power across the Russian Federation." - Europe-Asia Studies
