crease the effective exchange rate of the ruble
by 145 percent since 2001, undermining ef-
forts to build markets for Russian exports
other than oil and gas.
sist straightforward solutions are related to
Russia's political and economic cultures.
ering from the 1998 crisis, Russia was brush-
ing aside nascent democratic institutions and
increasing state control over the economy.
The World Bank's Governance Index mea-
few countries that fare badly on the index
manage sustained growth.
in the 35th percentile among all countries in
(which with Russia make up the up-and-
known as BRIC) managed scores in the 40s.
Russia tallied a 24th percentile ranking in po-
it was plainly heading the wrong way: the fig-
ure was down to the 45th percentile in 2008.
latory quality pushed Russia from the 19th
percentile in 2000 when Putin took the reins
of government from Boris Yeltsin, to the 47th
the presidency, the figure had retreated to the
scored a miserable 20th percentile in 2008,
compared with a 49th percentile average for
the other BRICs. By the same token, Russia is
lagging miserably in control of corruption,
ending up in the 15th percentile, versus 48th
for the other BRICs.
sure, but one that offers insights into the effi-
ciency of economies is indicative. By Heri-
tage's reckoning, Russia ranked 146 out of
and Burkina Faso. Likewise, Russia ranked a
mere 58th out of 122 countries on the Milken
Institute Capital Access Index in 2008, behind
Peru, Egypt and Belarus.
bers? Two reasons:
and reduce corruption, undermined balanced
own power and to increase Russia's resilience
to short-term currency shocks.
underpinned by energy exports are unlikely
to sustain growth once prices decline. One
reason is that a surfeit of cash during the
boom reduces the government's will to exact
taxes and thus the need to earn citizen sup-