Benefits and Risks of Political Modernization in Russia

Abstract

A government-proclaimed desire to promote technological innovation and boost economic growth in Russia implies the need for the state to take an active role in the economy and to provide the right stimuli and guarantees for investors. Since under its current political regime the Russian state lacks trust and credibility, and since the actions of the state to promote innovative economic development as well as its likelihood of succeeding depend on its type and characteristics, such an economic agenda would demand democratization. For entrepreneurs and investors, in its current form the Russian state is inefficient, riddled with corruption, lacking in accountability, and unpredictable. Most importantly, it cannot credibly commit to respect property rights and sustain the rules with which they are associated. Democratic reforms, ideally, could modernize the Russian state and make it simultaneously strong, limited, accountable, conducive to good governance and, thus, an effective agent of economic modernization. Yet the same Russian leadership that proclaims the vital importance of economic and technological innovation is reluctant to engage in political modernization, attempting instead to improve the existing model of governance by administrative methods.