13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


The Russian Economy in the Year 2006

January 1, 2007


The good times that Russia has enjoyed for the past six years continued in 2006. I will describe some of the elements of this remarkable recent performance, but only briefly. My main remarks will rather focus on two broader issues. The first is how I view Russia’s political economy working today. This is the system of “rent sharing” that Professor Barry Ickes of Penn State University and I have written about. I will also discuss Vladimir Putin’s key role in shaping and managing this system. The second topic is the fundamental challenges the economy faces for the longer term. I will especially focus on the pitfalls along the way. In a new book we are writing, Barry Ickes and I describe them as the “Bear Traps.” I will conclude by asking how, against this background, Russia’s economy may evolve in the shorter and longer term.