Who lost Russia? This question remains hotly debated in media and policy circles across the West. The question seems to presuppose, not only that Russia was lost, but also that if someone in America’s government, the IMF, or EU headquarters had been paying more attention or had devoted more resources towards helping Russia’s government, the results would have been better. But hardly anyone today thinks the West should have been putting more money into Russia, or even that it should have been helping Yeltsin, and now Putin, to a greater extent than it has been.

An opposing critique, favored by some of George W. Bush’s advisors, holds that the Clinton Administration tried too hard to help, not that it did not try hard enough. There is something contradictory about using the phrase “Who lost Russia?” to mean that the US tried too hard to help. The harshest criticism comes from those (including some Bush advisers) who say America and the West sent money down a rat-hole instead of following the practice adopted to fighting some wildfires B ie, standing back and letting the flames burn themselves out.

All in all, the patiently calibrated approach of the last eight years has been right for the most part. Few will agree with this, probably not even those responsible for conducting Russia policy over the past years. So let me add that I do not claim that things are good in Russia, nor that American and Western policy had much positive effect there, nor that there isn’t corruption, misery, and their like in abundance across Russia.

Of course, the current situation for the West is more satisfactory, not only from where it was 10 or 20 years ago, when the Soviet Union’s fall did not appear even a remote possibility, but also from where it might have been given Russia’s economic hardship and social instability. Russia pulled back from hyperinflation in 1995; it has not veered off either toward rightwing dictatorship nor back to Communism; nor has it entirely degenerated into anarchic chaos.

This is an accomplishment considering that Russia never had historical experience with any sort of democracy or market system. Russia probably hasn’t even done as badly as Ukraine, Belarus, and Central Asia. But I don’t claim that America and the West necessarily had much effect on this outcome B beyond doing what they do best: thriving domestically, and thus making others want to become free market democrats. What happens in Russia is mainly determined by Russians.

Consider specific policy choices faced by the West and the specific decisions made, not an imaginary menu that includes the option “Establish the rule of law first, eliminate corruption and inequality, then proceed with market reforms and aid.” That combination of choices was never an option. The West’s choices attempted to strike a balance between too much and too little. The big decisions included:

• approving Russian membership in the IMF in 1992 and immediately giving it a $1 billion stand-by arrangement, with the usual conditions;

• working closely with Yeltsin in the run-up to Russia’s presidential election in 1996 and thereafter, despite his personal shortcomings and the dubious “shares-for-loans” privatizations of the summer of 1995;

• subsequently augmenting the IMF lending agreement by making more resources available even though most of the conditions set previously had not been met, in particular the elimination of unsustainably large Russian budget deficits because of a poorly-functioning national tax collection system;

• pulling the plug in August 1998 when the IMF program didn’t work (much IMF money having quickly flowed back out of the banking system), with the result that the Russians immediately devalued the ruble, defaulted on domestic debt, and imposed controls on capital outflows (whence contagion spread throughout the world, in the worst phase of the 1997-98 financial turmoil);

• adding new conditions to those required for an IMF program in the latter part of 1999.

Although the odds for success in 1991-2 were not great, the West had to try. Not to try would have sent a signal that the West would never help. And, despite “moral hazard,” about which we now hear so much and which everyone agrees was greatest in respect to nuclear-armed Russia, the West did let Russia default in 1998. This was a lesson for the world B debtors and creditors alike B that conditionality is more than mere rhetoric, and bailouts are not unlimited.

Europeans complain that the US used the IMF as a tool for its purposes. It may be true that the mandate of the IMF, which is supposed to make decisions strictly on objective economic criteria rather than broader political goals, was stretched at times. America, in particular, may have given Russia more attention than another country would have. But the basic IMF principle of conditionality was not twisted until unrecognizable. In the real world there was no other way of helping. Everyone, not just Americans, has a stake in Russia prospering peacefully.

In general, the guiding principle in the future should be to continue to stand ready to help Russia if social and political conditions supportive of the rule of law and economic reform manifest themselves. Standing ready includes mustering more domestic support for assistance than is currently available, not whipping up anti-Russian feelings with supposedly new discoveries of money-laundering. But support should always be conditional on fundamentals. In the end, the West must recognize that much of the time there is little that can be done.