Shocks and Institutions: The Paradoxes of Russian Crisis

The modern crisis phenomena in the Russian economy had some objective grounds, but they would never get real without the two external shocks that were almost synchronized in time. The first shock is the decline in world oil prices, which is caused, for the Russian economy, by the failure of system analysis and forecasting of the branch markets dynamics. The second shock is the introduction of sectoral, primarily financial, sanctions against Russia. The result of these two shocks, coupled with fundamental institutional conservatism, is the transition of institutional and structural crisis in the Russian economy in the form of a classical cyclical crisis. The inviolability of the management, personnel and ideological (in the sense of economic concepts) foundations of the Russian economy ensures, at least, the protracted nature of the current crisis, due to the limited capacity of the structural compensators to change the economic dynamics without large- scale support of financial market, technological exchange, economic incentives and positive expectations of economic agent