Russia 2010: It's a Russian Bear, Not a Bull!

Abstract

This study explores scenarios for economic development in Russia in the coming decade. A novel method - combining scenario technique and empirical growth theory - permits the inclusion of key political and institutional factors in a quantitative economic framework. The political, economic, institutional and international trends analysed make a strong case for a baseline scenario in which Russian investment rates will rise only moderately up to 2010. Against the background of optimistic growth projections pinned on the hope of a rapid improvement of the investment climate our baseline scenario calls for more realism. Alternative scenarios are conceivable but less likely: events could take a turn for the better, if a favourable combination of economic and political conditions leads to a second transition. But downside scenarios are possible, too.

Keywords: Russia, economic growth

JEL Classification: O43, O 47, O51, O11, O14