Purpose
The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet institutions collapsed and were either reformed or replaced in a new Russian institutional landscape. The paper presents a fact-based and balanced view of Russia’s evolving role in the global economy, as distinguished from the sometimes one-sided view presented by some Western commentators. The authors establish that the two countervailing views are fundamentally based on different cultural perspectives about institutions, primarily the roles of business and government.
Design/methodology/approach
This paper is developed as a perspectives article drawing upon the decades of academic and business experience of all three authors with Russian business, management and the economy. The paper focuses on the structure of Russian institutional change and places it within the historical context of the challenges of various periods of time from the late 1980s to the present. The authors posit that cultural foundations complicate that institutional evolution.
Findings
Russia will remain a major player in world markets for energy, raw materials and armaments for the near future at least. Principal institutional questions facing Russia have to do with how to reduce the country’s overall dependence on raw material exports, with its vulnerability to world market fluctuations, and how to modernize Russian economic and political institutions. The degree of success in addressing these questions will depend largely upon the ability of the new and reformed economic institutions to show the flexibility to respond to changes in the global order, on whether political considerations will continue to supersede economic issues, and how markedly cultural traditions will continue to impede positive changes.
Research limitations/implications
The entire system of international trade is under question, disrupted by the growing nationalism that is threatening the globalization that became institutionalized over decades in the wake of the Second World War. Russia’s future role is partially dependent upon how new patterns of international trade develop in response to the current disruption of established trade regimes, and by how political conflicts are expressed economically. The authors observe that Russia’s historical and cultural traditions, especially acquiescence to a highly centralized government with a strong autocratic leader, limit the country’s options. The authors explore how Russia’s reactions to Western sanctions have led to a new strategic approach, moving away from full engagement in the global economy to selective economic, and sometimes political, alliances with primarily non-Western countries, most notably China. The authors contrast Russia’s situation with that of China, which has been able to make substantial economic progress while still embracing a strong, centralized political institutional structure.
Originality/value
Many Western analysts have viewed Russian institutional evolution very critically through the lens of Western politics and sanctions, while Russia has continued along its own path of economic and institutional development. Each view, the authors argue, is based upon differing cultural perspectives of the roles of business and government. As a result, a distinct difference exists between the Western and Russian perspectives on Russia’s role in the world. This paper presents both points of view and explores the future of Russia’s position in the world economy based upon its evolving strategy for national economic policy. The authors contrast the situations of Russia and China, highlighting how Western-centric cultural views have affected perceptions of each country, sometimes similarly and at times with decided differences.
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