Russia and the United States: Still cold in Northeast Asia?

The US has been reluctant to acknowledge Russia's relevance to the Asia‐Pacific, the author says, because “too little time has passed since the interests of these two former adversaries collided in the region.” Russia has the longest Pacific coastline and borders with China, Japan, Korea and Mongolia. Despite the end of the Cold War, however, Russia is still not an integrated participant in Northeast Asian economic cooperation. Vladimir Ivanov is a Visiting Fellow at the Economic Research Institute for Northeast Asia in Niigata. He argues that Russia has made a clear choice between “guns and growth,” and that the country should be allowed to come in from the cold and join this region's development.     

Utilization of fixed capital and Soviet industrial growth

Growth rates of output and factor productivity in Soviet industry fluctuate around a long-term downward trend. These fluctuations can be partially explained by fluctuations in the growth of services of capital. The capacity utilization rate is taken as a proxy for the extent of utilization of capital stock. Variations in the capacity utilization rate explain a significant part of the changes in the rate of growth of total factor productivity between 1970–1983. Declines in the capacity utilization rate are caused by errors in the allocation of investment, which create an imbalance of capacities between raw-materials and manufacturing sectors.     

The vicious circle of post-Soviet neopatrimonialism in Russia

Since the collapse of Communism, Russia and some other post-Soviet states have attempted to pursue socioeconomic reforms while relying upon the political institutions of neopatrimonialism. This politico-economic order was established to serve the interests of ruling groups and establish the major features of states, political regimes, and market economies. It provided numerous negative incentives for governing the economy and the state due to the unconstrained rent-seeking behavior of major actors. Policy reform programs revealed these institutions to be incompatible with the priorities of modernization, and efforts to resolve these contradictions through a number of partial and compromise solutions often worsened the situation vis-à-vis preservation of the status quo. The ruling groups lack incentives for institutional changes, which could undermine their political and economic dominance, and are caught in a vicious circle: reforms often result in minor returns or cause unintended and undesired consequences. What are the possible domestic and international incentives to reject the political institutions of neopatrimonialism in post-Soviet states and replace them with inclusive economic and political ones?     

Between crises and sanctions: economic policy of the Russian Federation

This paper examines the root causes and features of crises of the Russian economy in 2014–2015 as a combination of structural and institutional problems, as well as cyclical and external shocks. The demand-side model of economic growth based on massive windfall revenue from oil and gas exports from the 2000s is now exhausted, and the country needs to shift to a new, supply-side model of growth. Mobilization and liberalization are discussed as two key economic policy alternatives. The analysis includes historical retrospection, which provides some important lessons from economic developments in the twentieth century: the Great Depression and the period of stagflation, the Soviet industrialization debate and perestroika, and the New Economic Policy in the USSR and the contemporary modernization of China. Special attention is paid to the mechanisms of economic growth acceleration in present-day Russia. They include macroeconomic stabilization, structural and institutional reforms based on liberalization of economic activity, and guarantees of property rights.