Russian Patrimonial Capitalism and the International Financial Crisis

Abstract

The international financial crisis brought Russia's run of economic growth to a halt and has given a greater sense of urgency to President Medvedev's calls for modernization. This, however, does not mean that crisis has changed Russia or its political economy. Russia's economic system is a form of patrimonial capitalism, a particular form of patrimonialism created when patrimonial systems reform under the influence of global economic forces. Russian patrimonial capitalism developed in the 1990s and stabilized under Putin. This type of capitalism is hard to change and does not tend to promote economic modernization or diversification. The crisis has so far not fatally wounded this system, and this will make future reform harder to secure.