Russian Economic Reform: Is Economics Helpful?

Abstract

This paper examines how issues ranging from inflation to monopolization in the former Soviet Union are occasionally misdiagnosed, leading to sub-optimal prescriptions for reform. The misdiagnosis occurs because the pre-reform state of the Russian economy is often taken at face value as a centrally-planned economy, Russian official statistics are accepted uncritically, and the actual effects of changes in the former Soviet Union are frequently taken to be equivalent to their measured effects. The theme that emerges when an attempt is made to apply basic economic principles to Russian economic reform is that problems that are often attributed to reform are already present in the current, partially-reformed Russian economy.