Welfare State Developments in the Russian Federation: Oil-Led Social Policy and 'The Russian Miracle'

Abstract

This article investigates the main welfare state developments of the Russian Federation that have occurred since the fall of communism. It argues that the contemporary welfare expansion strictly depends on high oil and gas prices, and that this oil-led social policy makes the future of the 'Russian Miracle' highly volatile. The main conclusion is that the Russian welfare state will be able to function properly and to ensure social integration and solidarity only under conditions of sustained oil-led growth. This article also identifies a variety of different, but equally important, endogenous, as well as an exogenous, factors that have influenced the social policy developments in the Russian Federation since 1989. These correspond to the existence of few veto points present in the political arena, the lack of a well structured system of interest representation, the presence of informality in the welfare state organization, but also to the presence of national economic vulnerabilities and/or strengths in the now open global economy, as well as to non contingent decisions taken in strategic sectors of the state, such as those related to the energy or defense sector.

Keywords: Russian Federation, post communist social policy, welfare state developments, factors of welfare state change, oil-led social policy, Russian miracle

JEL Classification: P26, P30, P51, O10, N30, J18, D61, D31