Saturday, September 06, 2014

Peter Turchin on Ukraine

Peter Turchin, author of 'War and Peace and War' has some articles on Ukraine from March this year. One of them Wealth and Democracy in Ukraine is in two parts. In the second part, he compares Ukraine with Russia and Belarus. It suggests that a combination of democracy an oligarchs is bad for economic well bein. Apparently, Belarus which has a dictator but no billionaires is doing better than Ukraine thouh it has lesser resources. Excerpts.
"Russia may not be a good comparison because of its vast mineral wealth in oil and gas. Worse, in some ways, Russia is even more oligarchic than Ukraine – it has a truly remarkable number of billionaires, for a medium-wealth country (I tried to count them in the Forbes’ list, but lost count after 100). Still, there is one important difference between Russia and Ukraine.
The Russian oligarchs, although they came very close to seizing power during the 1990s, ultimately failed to become the ruling class, as it happened in Ukraine. Following a struggle between the economic elites and administrative elites (the ‘State Nobility’), the latter won decisively, thus reverting to the historical pattern that characterized power relations in Russia since at least the fifteenth century. What we have now in Russia is the rule by fairly corrupt state officials working closely with their business cronies. Politically the business elites, unlike in Ukraine, are thoroughly subordinated to the bureaucrats. While the governance of the country is far from optimal, we should also note that, unlike in Ukraine, the Russian system does deliver better results for common people....
Perhaps a better comparison is the one with Belarus, a country that lacks not only the mineral wealth of Russia, but also the excellent climate and rich “black soils” of Ukraine. Nevertheless, Belarus manages a very respectable GDP per capita of $16,100, more than twice as good as the one in Ukraine. Furthermore, Belarus doesn’t sport even a single billionaire in the Forbes list. This means that the median Belorussian income is way above that of Ukraine, and probably better than in Russia (a more equitable division of wealth elevates the median). It’s a remarkable achievement for a country that lacks any oil and gas, and is located in a rather unproductive ecological zone."
"Returning to our comparison of the three East Slavic countries, it is startling to observe that the least democratic, Belarus, is also the most egalitarian, while the people of the most democratic, Ukraine, are the poorest. And don’t forget, the GDP data were for 2013. Today, following the February 2014 Revolution, the GDP has likely declined even more."

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