Public choice economics of the Ukraine crisis

We use public choice theory to examine the calculus of the Russian aggression against Ukraine. We hypothesize that Putin’s regime acts as a tinpot dictatorship, using political loyalty and repression to stay in office. During Putin’s first two-term presidency, an improvement in Russia’s economic performance increased the supply of political loyalty and resulted in a slow fall in political repression. The global financial crisis deteriorated Russians’ living standards between Putin’s second and third terms in office. The deterioration in the country’s economic performance unambiguously resulted in a fall in the supply of loyalty and increased repression. Consistent with our hypothesis, we argue that Putin’s regime pursued military conquest to increase the aggregate supply of political loyalty.