reforms in post-Maidan Ukraine, with a specific focus on the response to the outbreak of polio in the summer of 2015 and on its recently passed landmark health system reform legislation; Russian “brain drain”; and Russia’s attempted emergence as a global health leader. Twigg has testified as an expert witness before the U.S. Congress and has been a member of several congressional and other high-level advisory groups on Russian affairs. She was a 2005 recipient of the State Council on Higher Education in Virginia Outstanding Faculty Award. She holds a B.S. in Physics from Carnegie Mellon University, an M.A. in Political Science and Soviet studies from the University of Pittsburgh and a Ph.D. in Political Science and Security Studies from MIT.
Contents
Chapter 1Putin’s Muscovite Economy
Steven Rosefielde
Chapter 2Russia’s Macroeconomy — A Closer Look at Growth, Investment and Uncertainty
Torbjörn Becker
Chapter 3State-Led Innovation and Uneven Adaptation in Russia
Satoshi Mizobata
Chapter 4Fundamentals and Recent Trends in Russian Banking
Victor Gorshkov
Chapter 5Russian Health and Demographic Trends and Prospects
Judyth Twigg
Chapter 6Can Russia Catch Up/Keep Up? Russian Science and Education in Putin’s Fourth Term
Harley Balzer
Chapter 7Russian Defence: Economic Constraints and Potential
Steven Rosefielde
Chapter 8Military Potential Revisited
Masaaki Kuboniwa
Chapter 9Can Russia Sustain Its Defence Buildup?
Stephen Blank
Chapter 10The Fighting Power of Russia’s Armed Forces
Petteri Lalu
Chapter 11On War and Peace: Russian Security Policy and Military-Strategic Thinking
Gudrun Persson
Lance Alred and Madina Rubly
Chapter 13Western Sanctions against Russia: How Do They Work?
Susanne Oxenstierna
Chapter 14Russia’s Arctic Policy: Between Confrontation in Europe and Irrelevance in Asia
Pavel Baev
Chapter 15Russia’s “Turn to the East”, 2012–2018
Andrei P. Tsygankov
Chapter 1
Putin’s Muscovite Economy
Steven Rosefielde
Russia’s economy is an imperfectly competitive market system with Muscovite characteristics (Clark, 1940). The demand and supply of factors, finance, production and distribution are significantly, but not completely, governed by competitive market forces. Private individuals and institutions own most of Russia’s productive assets on a freehold basis, but the state holds title to the military industrial complex (MIC) and natural resources in the people’s name. Large firms (oligopolies) exert market power, supported by state policy and the judiciary. The rule of contract law assists privileged insiders. Rent-seeking (lucrative state contracting with privileged insiders) and rent-granting are endemic. Criminal influences are strong and the “mafia” operates in collusion with the Federal Security Service [Federal’naya sluzhba bezopasnosti Rossiyskoy Federatsii (FSB)]. The state allows loyal insiders to steal public assets (kleptocracy) (Aslund, 2019a, 2019b; Dawisha, 2014). Entrepreneurship is legal; however, it is restrained by predatory political risks.
Russian producers under these conditions cannot competitively maximise profit, and individuals are unable to maximise consumer utility. The distribution of income is inequitable. Workers are underpaid, and powerful individuals accumulate immense unearned wealth. These imperfections are not unique. Most market systems are inefficient; however, Russia’s market deficiencies are especially strong, exceeding those endemic in America, the European Union and China (Rosefielde and Leightner, 2017).
Anti-competitiveness impedes economic growth by hampering consumer-driven technological progress and entrepreneurship, while State controls allow Kremlin leaders to
