Honesty is the Best Policy in Russia
CAMBRIDGE: If opinion polls are right, Russia's people are poised to deliver Russia's government a stinging rebuke in December's Duma elections. Russians are reacting not merely to the strains of economic crisis and social change, but to staggering government corruption. Because the real progress of economic reform was compromised by mass corruption, it is no surprise that public support for it is tenuous.
Price liberalization, stabilization, and privatization were pursued since 1992 with varying degrees of commitment. These policies, even if implemented incoherently, reshaped the economy. Value-subtracting heavy industries shrunk, services expanded to over 50% of GDP, and the private sector produces almost 60% of Russian output.
Although transition was bound to be painful, Russia's epidemic of corruption caused more political damage than the economic side effects of reform. Government tolerance of bribery and racketeering enabled opponents to say the "mafia" was grabbing the gains of economic change. The government, and thus economic reform, will pay for this neglect at the polls.