Russia's Warped Transition: The Destructive Consequences of Ethically Unconstrained Utility Seeking

Abstract

The Russian transition economy is best understood as a system that decriminalizes all power-seeking behaviors proscribed by textbook general competition. It is failing because the government sanctions oligopoly, monopoly, asset-grabbing, rent-seeking, elite misappropriation of state funds, the mis-administration of state assets, the mis-regulation of the private sector, and the forced suppression of competition. The efficiency losses caused by these abuses are examined in the factor, product, finance, distribution, and redistribution markets. The analysis suggests that the Russian economy won't recover until it empowers competitive efficiency and recriminalizes private and social exploitation.