THE MOST fundamental problem with General Odom's analysis, however, is that it lacks perspective on the very long and difficult process of the development of markets and constitutional democracy. What we call corruption is a key part of this process, for it builds a network of people in different elite groups who have an interest in property rights, and in a government that both promotes economic growth and restrains the ruler. If a businessman brings a politician and a military officer into his project, then the government will protect and promote growth for personal reasons, and the military will support it. Members of the elite will support property rights so they can retain their wealth after they leave office, and so that their children can inherit it.¹

But such investment-oriented corruption must be broadly based to be a positive factor in development. In Russia, major corruption has been too narrowly concentrated. Broad corruption has been limited to forms such as bribes that are dependent on a person remaining in office. The military let the Soviet system fall because its leaders had received none of the economic benefits of an American junior officer. Yeltsin's allowing the top generals to "privatize" the Ministry of Defense dachas in 1991 was crucial. The failure of Putin to bring Russian officials and military officers into the kind of development-centered corruption found in other Third World countries makes the Putin regime very susceptible to a military coup unless it changes its economic policy.

The notion that well-educated Russians cannot have China's rate of economic growth is silly. Douglass North, whom General Odom misinterprets, and Joseph Stiglitz, who just received a Nobel Prize, were directing their fire at the policy of Larry Summers at the Treasury Department, at his faith in neo-liberal economics and at the Russian leadership's willingness to adopt this policy in order to receive Western money. North and Stiglitz rightly said that this policy was totally inappropriate for market building. The policy will go down with pre-1941 Comintern support for Hitler as a classic case of the ability of dogmatic ideology to cause human suffering on a massive scale.

But just as the failure of Russian reform was the product of policy, so a change of policy can produce a different outcome. If the Russians adopt the advice of Alexander Gerschenkron and Joseph Stiglitz, if they re-adopt the policies of Nicholas II and Count Sergei Witte, they too can and will have rapid and stable growth. There are too many in the civilian and military elite with a vital personal interest in that development for it to be postponed for much longer.

We lose perspective about time when we live through torturous periods. We forget that 13 years passed between the Declaration of Independence and General Washington's inauguration. We don't discuss the fact that the Constitutional Convention was the result of Washington's threatened military coup against the Continental Congress and that threats to his property rights in western Virginia were one of the factors driving him. It will be December 2004 before a similar period passes in Russia. It would be surprising if Russia were not following something like America's time framework. The determination of Russia's current rulers to keep their money abroad shows that they have a similar expectation. Let us hope that the result will be a George Washington and not the Napoleon Bonaparte produced by the nearly simultaneous French Revolution.

Jerry F. Hough is James B. Duke Professor of Political Science at Duke University and the author, most recently, of The Logic of Economic Reform in Russia (Brookings Institution).

1 See Hough, The Logic of Economic Reform in Russia (Washington: Brookings, 2001).

Geoffrey Hosking, University College, London:

ACCORDING to Odom, the transition" in Russia is well and truly over. The country has become trapped in "path dependency": a vicious and ineluctable circle of corrupt authoritarian rule, economic stagnation and irresponsible behavior abroad. Its government cannot collect taxes, its oligarchs drain resources out of the economy instead of investing in it, and the army tries to dominate Chechnya by violence and intimidation.

One cannot deny the verisimilitude of Odom's picture. But the inferences he draws from it smack of American arrogance and exclusivity that increasingly alarm and repel the outside world including some of America's closest allies. According to his model, only a few virtuous counties in the world are able to combine liberal democracy with a properly functioning market economy. These depend on having institutions of the kind created in England following the "Glorious Revolution" of 1688--89 or in America after it declared independence. All other countries have "weak states" and an "ineffective economy", and are unlikely to escape from this condition since once a country has put in place a set of institutions--formal and informal--they are difficult to change." Among their number is Russia, which differs from the others only in claiming a great power role. We should reveal that claim to be hollow and abandon our attempts to integrate Russia into major international institutions. Thus Odom.

Odom derives his notion of "path dependency" from Douglass North, who has indeed made a major contribution to economics by demonstrating that political and social institutions play decisive roles in generating sustained growth. But it is caricaturing North's work for Odom to draw such heavily determinist conclusions from it, and doing so suggests an exclusivist Anglo-American version of mod emization and globalization that threatens the stability of societies when thoughtlessly applied--as it often is nowadays. Countries can modernize in different ways, and with different institutions. France, as Odom notes, did not in the 18th century adopt the same institutions as did England in the Glorious Revolution; nevertheless, despite the destructive wars fought on its territory over two centuries, it did not get mired in "path dependency." The French economy today is at least as prosperous and productive as that of Britain, and its democracy is no less stable. The same could be said of several other European countries as diverse as Italy, Germany and Sweden.

Russia's economic performance during the first post-Soviet decade has unquestionably been very disappointing. However, it could be argued that it was precisely adherence to an Americanized model of development, imposed through the IMF, that best explains the failure. I would not take that argument too far, since the Soviet legacy would have been difficult to overcome in any event. But it is worthy of note that Russia's economic performance has improved markedly since the crash of 1998 and its disengagement from some IMF-sponsored programs. Russia's potential was and is considerable. Its resources are abundant and still insufficiently mobilized. Furthermore, despite the degradation of the last decade, it still has a relatively low-paid and highly skilled workforce, well- qualified professional staffs, and a science and technology base capable of being restored to its previous high international level. This is a combination of resources not commonly found in foundering Third World economies.

ODOM'S accusation that Russia plays an irresponsible and unconstructive role in world affairs is also overdone. Its record is far from irreproachable: the brutality of Russia's attempt to subdue Chechnya has created massive devastation and has probably reinforced terrorism. Russia has not always behaved constructively elsewhere, either--for example, in Abkhazia (but that was at least in part because international institutions did not respond to its request for help with peacekeeping there) and in the Balkans during the lead-up to the Kosovo crisis (but that was because NATO did not genuinely consult with it about a region in which Russia has traditionally taken a close interest). But all the same, during the last 15 years the Soviet Union and then Russia dismantled huge quantities of weapons, dissolved a military alliance, and withdrew from Afghanistan and most of central and eastern Europe, including the Baltic states and Ukraine which were once parts of its sovereign territory. I should have thought this a record to praise.

It is true, as Odom asserts, that Russia is no longer a great world power with claims to rival the United States. It remains, however, a very significant regional power, without whose active involvement none of the major security problems of Europe or central, north and east Asia can be solved--not to mention international terrorism. It borders on more countries that any other state in the world. Its aging and degrading nuclear arsenal is in some ways more dangerous in that condition than if it were being properly maintained and controlled. All these factors suggest that we should integrate Russia into international decision-making institutions, not dismiss it with a condescending wave of the hand.

Odom is right that there is much to be gloomy about in Russia today. But there are also countervailing factors. No one can be certain about the country's future, but writing off such a major power as one to be shunned because it is condemned to decades of the "weak state" syndrome and economic stagnation is to help generate the unfortunate situation it describes. Russians are very Sensitive to insults to their honor, and they are at their most formidable when their backs are against a wall. It is much better to regard Russia as a power capable of standing up for itself; willing and able to play a responsible role in world affairs when it is treated as a potential partner. This approach may turn out to be unrewarding, but it is preferable to err in that direction than in Odom's.

Geoffrey Hosking is Leverhulme Research Professor in Russian History, School of Slavonic & East European Studies, University College, London, and author of Russia and the Russians: A History (Harvard University Press, 2001).

Essay Types: Essay