The state and economic involution: Russia through a China lens

Why has the Russian economy declined at the rate the Chinese economy has grown? In China the party-state has made possible the decentralization of property relations and the hardening of budget constraints whereas in Russia the disintegration of the party-state has led to privatization and soft budget constraints. Whereas the former combination entailed accumulation, the latter combination entailed ''involution,'' that is, an economy that eats away at its own foundations by funnelling resources from production to exchange. Russia's involution has proceeded in a combined mode, that is, through a series of phases in which government policies try to rectify the unintended consequences of previous policies. Involution is also uneven as different industries adopt different strategies. Some rapidly exited from the old order and then disintegrated while others voiced their demands To the state and declined more slowly. Copyright (C) 1996 Elsevier Science Ltd