How Russia Became a Market Economy

How Russia Became a Market Economy

How Russia Became a Market Economy

How Russia Became a Market Economy

Synopsis

This book provides the most detailed and insightful assessment to date of the Russian transformation from a socialist economy to a market economy. As a longtime specialist on the Soviet economy and an economic adviser to the Russian government during most of this period, Aslund analyzes the original intentions of the government, what they were to accomplish, and why they fell short. According to Aslund, the Russian transformation has not been too quick, as many maintain, but rather too slow.

Excerpt

The transformation of the Russian economy into a market economy has been marred by controversy in both Russia and the West. While taking a clear line in favor of a radical approach, this book tries to investigate a multitude of problems involved and underlines the extent of the collapse of the Soviet economy and system. It provides an account of how the economic reform program was developed, highlighting the acrimony of the internal Russian debate.

In his analysis of the Russian economic transformation, Anders Åslund gives many examples of how halfway measures caused problems, but he notes that new radical measures eventually resolved many of the difficulties. Specifically, Åslund argues that inflation could only be controlled after the ruble zone had been broken up. He acknowledges that liberalization was not far-reaching enough. It brought well-placed people large rents. Moreover, macroeconomic stabilization was fought by state enterprise managers who did not want to adjust to a market economy and who wanted to make as much as possible from state subsidies during the transition. Privatization appears to have been surprisingly successful, however, because of clever policies proposed by the reformers. On the whole, Åslund believes that Russia has really become a market economy, however imperfect.

The Brookings Institution gratefully acknowledges the financial support provided for this project by The Carnegie Corporation of New York and The John D. and Catherine T. MacArthur Foundation.

The views expressed in this study are those of the author alone and should not be ascribed to any of the persons or organizations mentioned . . .

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