Democracy often seems bureaucratic with high ‘transaction costs’, while autocracies seem to get things done at lower cost. This column discusses historical research that refutes this. It finds empirical support from Soviet archives for a political security/usability tradeoff. Regimes that are secure from public scrutiny tend to be more costly to operate.
From public finance to climate change, democracy looks to be in trouble. In many Western countries, political decisions are gridlocked while economic, social, and environmental imbalances accumulate. Our leaders juggle public opinion, private lobbies, and expert advice while trying to live within past promises and present legal obligations. The costs of reaching decisions are often high and sometimes prohibitive, leading us into democracy’s ‘do nothing zone’, where bargaining fails and the outcome is procrastination (Wintrobe 2000: 247-279).
Was Stalin necessary for Russia’s economic development?
Anton Cheremukhin, Mikhail Golosov, Sergei Guriev, Aleh Tsyvinski10 October 2013
Soviet Russia’s industrialisation was a pivotal episode in the 20th century, and economic historians have spent decades debating the role of Stalin’s policies in bringing it about. This column argues that Stalin’s industrialisation was disastrous even in purely economic terms. The brutal policy of collectivisation devastated productivity, both in manufacturing and in agriculture. The massive welfare losses in the years 1928-40 outweighed any hypothetical gains from Stalin’s policies after 1940, and Russia would have been better off under a continuation of the ‘New Economic Policy’.
In 1962, a prominent British economic historian, Alec Nove, asked whether Russia would have been able to industrialise in the late 1920s and 1930s in the absence of Stalin’s economic policies (Nove 1962). This question is still important for several reasons.
The transformation of Soviet Russia from an agrarian to an industrial economy is a key episode in economic and political history.
The industrialised Soviet Union played a key role in the victory over Nazi Germany during WWII and, as one of the two superpowers during the Cold War, reshaped the postwar world.
It has become increasingly fashionable to talk about Europe without the euro. But this column points out that in the last century Europe has seen the collapse of three multi-nation currency zones: the Habsburg Empire, the Soviet Union, and Yugoslavia – and they all ended with disastrous hyperinflation. The lesson for the Eurozone is clear: avoid break up at almost any cost.
Articles on a possible breakup of Eurozone either see it as a mere devaluation (Lachman 2010, Roubini 2011) or reckon that its collapse would amount to a major economic disaster (Buiter 2011, Cliffe et al. 2010, Normand and Sandilya 2011). It seems the latter is more likely. Large imbalances have accumulated between southern debtor countries and northern creditor countries. Any capping of these balances would disrupt the payments mechanism between the Eurozone countries and impede all economic activity (Åslund 2012).
Russia’s national income in war and revolution, 1913 to 1928
Mark Harrison, Andrei Markevich11 May 2012
At the start of the 1920s, Russia’s economy suffered the greatest economic catastrophe of a turbulent 20th century. This column argues that measuring this experience yields lessons for the relationship between state capacity, government policies, and economic development.
In 1914, Russia joined in the First World War. With the Bolshevik Revolution of 1917 Russia’s part in that war came to an end. A civil war soon began, that continued with varying intensity until 1920. It was followed immediately by a famine in 1921. Economic recovery began, but by 1928 the Russian economy had been caught up in Stalin's drive to “catch up and overtake” the West through forced-march industrialisation.
Before the fall of the Soviet Union, Russia's total fertility rate was 2.01. By 1999 it was below 1.20, before rising closer to 1.5 in 2007. This column uses micro-data analysis to examine what factors have driven this change. It supports the evidence from other countries that fertility is not solely determined by short-term factors such as rising incomes, the economic climate, or government initiatives.
Stalin’s mass killings are often viewed as the acts of a deranged dictator. But according to Konstantin Sonin of the New Economic School in Moscow, such violence may have reflected the Soviet leader’s rational efforts to avoid losing power. In an interview with Romesh Vaitilingam, recorded at the annual congress of the European Economic Association in Milan in August 2008, he discusses his research and its implications for thinking about modern day dictators.
Stalin’s mass killings are often viewed as the acts of a deranged dictator. This column suggests that such violence may have been the Soviet leader’s rational attempt to avoid losing power in a revolution.
While the people of the developed world are fascinated by electoral campaigns, more than a half of the world’s population does not have a chance to participate in elections. Yet any dictator needs some popular support; the difference is that he can trim his constituency, eliminating those who do not support him.