Introduction
Based on global evidence, oil is believed to be bad for democracy and bad for sustained economic
growth. Boix argues that there are zero examples of a successful transition to democracy in a
country where oil generates more than one third of its export earnings, which sounds like a death
sentence for Russian democracy.
Halperin et al contend that only eight countries in the past 20
years have enjoyed sustained growth under authoritarianism, while 60 authoritarian regimes saw
sub-par growth.
Indeed, casual scrutiny of the rise, fall and rise of the world oil price (Figure One) appears to
show a striking correlation with the rise, fall and rise of authoritarianism in Russia (Figure Two.).
However, this paper will adopt a contrarian position and challenge the idea that there is a single
explanation that can explain Russia’s political evolution. It also suggests ways in which Russia
may yet manage to beat the “resource curse.” It begins with a discussion of the way the resource
curse has been used to explain Russia’s political evolution, and a review of some comparable
cases. The following two sections summarize political and economic developments in Russia
1990-2006. The next part argues that there are some important sources of pluralism in Russia’s
political economy despite the prominent role of resource extraction. The following sections
examine some specific aspects of government policy.
Oil and gas played an important role in the pre-1991 Soviet economy. The newly discovered
Tyumen fields sucked up one third of new capital investment since the 1960s, and the Soviet
economy became the most energy-intensive in the world. The eightfold increase of oil prices in
the 1970s provided a boost to the Soviet economy, and encouraged Moscow to build pipelines to
export natural gas to Western Europe in the early 1980s. So far so good for the resource curse
argument – the hydrocarbons helped perpetuate Soviet authoritarianism. However, prices dipped
in the early-1980s, leading some to argue that the world oil price is the “smoking gun” that killed
off the Soviet system.
(See Figure One) If this were true, it could be seen as a partial challenge to
1 Carles Boix, Democracy and Redistribution (Cambridge University Press, 2004), p. 85. On Russia and
the resource curse, see Younkyoo Kim, The Resource Curse in a Post-Communist Regime: Russia in
Comparative Perspective (Ashgate, 2003). There is also a new collection by Michael Ellman (ed.),
Russia’s Oil and Natural Gas. Bonanza or Curse? (Anthem Press, 2006).
2 Morton H. Halperin., Joseph T. Siegle, and Michael M. Weinstein, The Democracy Advantage: How
Democracies Promote Prosperity and Peace, (Routledge, 2005.), p. 19. The eight are Bhutan, China,
Egypt, South Korea, Singapore, Taiwan, Tunisia and Vietnam.
3 Stephen Kotkin, Armageddon Averted. The Soviet Collapse, 1970-2000 (Oxford University Press, 2003);
Egor Gaidar, Dolgoe vremya. Rossiya v mire. (Moscow: Delo 2005). According to Gaidar - p. 342 tables
8.24-26 - the world oil price went from $7 barrel in 1971 to $66 1980, then $39 in 1985, and $20 in 1988.
while natural gas went from $197/1000 cm in 1985 to $90 in 1990.
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Convention