Tag: Election

Does Political Illegitimacy in Belarus Imply New Economic Risks?

Large group of peaceful demonstration in Belarus that represents Belarus and people who seek to avoid economic risks

Today’s political crisis in Belarus has given rise to the phenomenon classified in political science as political illegitimacy. However, this is not a pure political phenomenon. It causes adverse and severe economic adjustments. In a short-term perspective, it gives rise to numerous risks of financial destabilization. Moreover, it is likely to deepen the current recession and make it protracted. In the long-term, political illegitimacy causes adverse institutional adjustments and erosion of human capital, which is likely to lead a country into a long-lasting depression. We argue that resolving the political crisis in a way that revives trust and legitimacy is the only ‘good’ solution.

Short-term Economic Effects of Political Illegitimacy

Since August 9, 2020, Belarus has been widely discussed worldwide in mass media because of the country’s political crisis. Political scientists classify the current situation in Belarus as a case of political illegitimacy, i.e. there is no consensus in the Belarusian society concerning the recognition and acceptance of a new term for the governing regime.

In turn, the governing regime prefers to ignore the illegitimacy issue. There is an implicit assumption behind this:  illegitimacy is an intangible issue that can hardly result in any tangible threat to the sustainability of the governing regime.

We oppose this view and argue that, at least in an economic dimension, there are numerous channels through which illegitimacy transforms into tangible problems. Inasmuch as the stance of the economy affects political sustainability, it will undermine the latter.

From a short-term perspective, the issue of political illegitimacy has become part of the information accounted for in the decision-making of economic agents in Belarus. Hence, in their economic decisions they either try to struggle against it, or at least to hedge against corresponding adverse effects.

Most evident, the adjustments in decision-making has already visualized in households’ savings behavior. Directly, illegitimacy considerations gave rise to deposit withdrawals from the banking system and enlarged demand for hard currency. Consequently, this led to a rise in depreciation-/inflation-expectations and lowered public trust in the banking system, which in turn has amplified these patterns of the households’ behavior.  In August, Belarus experienced historical peaks in deposit outflows and international reserves were depleted as a result. This has substantially amplified the risks of financial turmoil.

So far, the authorities have curbed the financial stress by implementing a restrictive monetary policy. However, this does not suppress adverse patterns in households’ behavior. It only somewhat allows for a shift of adverse adjustments from financial markets towards the real economy. Moreover, it weakens but does not completely remove the threat of full-fledged financial turmoil, taking into account the systemic financial fragility in Belarus.

In addition to the illegitimacy issue itself, other adverse expectations are likely to give rise to unfavourable trends in households’ consumption behaviour as well. First, household consumption is likely to be dampened as a result of poor consumer confidence and sentiment. Second, additional losses in consumption are likely to occur due to tightening access to credit and progressing financial fragility.

Similar mechanisms are likely to be in place with respect to investment demand. First, poor confidence and sentiment undermine the investment activity of businesses. In Belarus, this channel is likely to be more powerful for private businesses, as investment plans of SOEs (due to their directive nature) are less sensitive to confidence and expectations. Second, investment activity is likely to decline due to deteriorating financial conditions and consequent contraction of credit. This linkage is especially important for the SOEs and housing investments.

The power of adverse consumption and demand trends is still questionable. However, preliminary estimates (introducing negative shocks in addition to scenarios in Kruk, 2020) show that they will reduce the output growth rate by at least 1.5-2.0 percentage points in 2020 Q3-Q4. In other words, they are expected to deepen the current recession and are likely to make it more long-lasting.

Deteriorating payment discipline is one more expected outcome from political illegitimacy. Being amplified by deteriorating financial conditions and economic activity, it can turn into a full-fledged payment crisis and fiscal instability.

Adverse Institutional Adjustments and Effects on Labor Market

Human-to-human interactions based on mutual benefit and trust are the core of a modern market-based economy. Key institutions created to support this interpersonal trust are laws and law-enforcement agencies. If a person does not trust her counterpart in a deal and does not think that she can take him to court to defend her rights, no deal will be signed. When an individual observes unrightful and politically-motivated court decisions in criminal cases, the distrust is also passed on to her beliefs that she would be able to defend her economic rights in the same court. As we observe police violence, tortures, and criminal charges of protesters with no attempt to prosecute those responsible, public trust in the law-enforcement system fades away, and thus all kinds of deals previously supported by a contract-enforcement system cease to exist.

The quality of a judicial system is widely recognized as a powerful determinant to overall institutional quality and the business environment. Hence, poor trust in it would likely undermine business activity directly. Existing businesses are to re-orient towards shorter-term strategies, being reluctant to initiating long-term and risky projects. Moreover, their inclination to geographical diversification of their business activity or even full migration is likely to rise. New entrants – that are extremely important to achieve productivity gains (Foster, Haltiwanger, and Syversen, 2008) – are less likely to start business in the country.

An increase in emigration is a usual consequence of political crisis, especially if it is accompanied by violence and politically-motivated incarcerations. What is unique about the current Belarus crises is that the list of potential emigrees include not only individuals but also firms, especially those working in the IT sector. After 11 August 2020, many IT companies found their employees detained, beaten and tortured. The offices of Yandex, Google and PandaDoc were searched and four top managers working at the latter were detained on tax evasion charges which are likely to be politically-inspired. As of the 18th of September, around 200 IT companies are considering relocation from Belarus and many more are considering partial relocation of their employees to already established foreign offices (Dev.by(2020a)). Results from a recent survey show that 33% of IT specialists have already decided to leave Belarus and the rest indicated that they will leave if the situation worsens (Dev.by(2020b)).

There are several major reasons for why the IT-sector is affected more by the current crises compared to traditional sectors of the Belarusian economy. Firstly, IT companies rarely own physical capital and thus can change their location in a matter of days by simply relocating their employees and laptops. Secondly, the IT labor market is global and mobile, and companies compete for the workers. Therefore, if many workers hold similar strong views on a particular situation, employers are bound to support them to a certain extent. As a result of the latter, many IT companies have openly voiced their disagreement with the election results and the politically motivated violence following the election. High-level employees and owners of major companies have participated in various opposition initiatives and as a result, now face retribution from Lukashenko’s government.

In addition to politically-motivated emigration, we can expect an increase in economically-driven emigration rates as the economy is expected to shrink (Bornukova and Lvovskiy, 2020).

What Is the Way Forward?

The political crisis in Belarus has triggered multidimensional adverse economic adjustments. Nevertheless, the authorities prefer to ignore the links between politics and economics. Hence, they try to overcome the problems with economic policy tools only. However, the room to maneuver with these tools is considerably restricted, and in some cases completely ineffective in suppressing adverse trends.

With respect to the short-term agenda, the authorities cannot offset the adverse trends. They can just mitigate challenges in one dimension and try to re-direct it to another one. For instance, currently the authorities focus on mitigating the probability of a full-fledged financial crisis. This consideration requires restricting monetary conditions. Otherwise, the exchange rate is likely to depreciate, which would be problematic from a corporate debt sustainability perspective. Although being somewhat effective in this regard, this policy mix dampens economic activity. From a financial dimension, the challenge is being re-directed to the real economy.

A similar picture might soon emerge in a fiscal sphere as well. An economic downturn and political crisis can result in a widening income gap. At the same time, the room for maneuver on the expenditure side is constrained. The funds accumulated from the previous periods have to a large extent already been spent to support SOEs. Hence, a further expansion of expenditures is hardly possible, as it would undermine fiscal and public debt sustainability. Therefore, fiscal stimulus is likely to fade away and can gradually even become negative.

Based on estimations in Kruk (2020), before the issue of illegitimacy appeared, the economy was developing according to a scenario of about a 3% drop in GDP in 2020 and a meagre recovery (if any) in 2021. Adding the assumptions associated with adverse adjustments due to the illegitimacy issue into the Kruk (2020) estimates, we show that the recession is likely to deepen by at least 1 percentage point in 2020. In 2021, output losses are likely to expand considerably. In regard to the long-term agenda, the situation is even worse. Conceptual decisions on economic activity by firms and households are closely linked with the issues of trust and legitimacy (Bornukova et al., 2020). Having lost them, the authorities are unlikely to have any effective tools for standing against adverse institutional adjustments and the erosion of human capital. Hence, we may expect that today’s poor growth potential of the Belarusian economy – up to 2.5% of per annum growth (Kruk, 2020) – is likely to weaken further and could even become negative. This means that the stagnation over the recent decade is likely to turn into a long-term depression.


The political crisis and the arising issue of political illegitimacy in Belarus impose severe economic challenges for the country. In a short-term perspective, there are numerous channels that are likely to deepen the recession and make it long-lasting. Moreover, risks to financial stability are progressing rapidly. Hence, there is little room for securing macro stabilization in the near future.

In a long-term perspective, the country is likely to suffer from the disruption of productivity enhancers. It will stem from lower business initiatives and the erosion of human capital. This is a way to a long-term depression.

Standard economic tools are mainly ineffective against both the short-term and long-term challenges. Resolving the political crisis in a way that revives trust and legitimacy is the only ‘good’ solution.


  • Bornukova, K. and Lvovskiy, L. (2020). Demography as a Challenge for Economic Growth, Bankauski Vesnik, 680 (3), PP. 31-35.
  • Bornukova, K. Godes, N., and Shcherba, E. (2020). Confidence in the Economy: What is It, How it Works and Why We Need it?, Bankauski Vesnik, 680 (3), PP. 95-99.
  • Foster, L., Haltiwanger, J., and Syversen, Ch. (2008). Reallocation, Firm Turnover, and Efficiency: Selection on Productivity of Profitability? American Economic Review, 98(1), PP. 394-425.
  • Kruk, D. (2020). Short-term Perspective for the Belarusian Economy, BEROC Policy Paper No. 92.
  • Dev.by. (2020a). https://dev.by/news/pochti200-relocate
  • Dev.by. (2020b). https://dev.by/news/opros-relocate-september2020.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Russian economy under Putin (so far)

20121229 Accountability in Russia Image 02

Russians are heading to the polling booths on March 18, but where will the economy head after Putin has been elected president again? This brief provides an overview of the economic progress Russia has made since 2000 as well as an economic scorecard of Putin’s first three tenures in the Kremlin and uses this to discuss what can be expected for the coming six years. Although significant growth has been achieved since 2000, all of this came in the first two tenures of Putin in the Kremlin on the back of increasing oil prices. In order to generate growth in his upcoming presidential term, Putin and his team will need to address the significant needs for reforms in the institutions that form the basis for modern market economies. Otherwise, Russia will continue to be hostage to the whims of the international oil market and eventually lose most of its exports and government revenues as the world moves towards a carbon free future. Perhaps this is beyond the scope of Putin as president, but not beyond the horizon of young Russians that will be casting their votes on Sunday and in future elections.

Let’s assume that Putin will be elected president again on March 18 (for once a very realistic assumption made by an economist). What will this mean for the Russian economy in the coming six years given what happened during his previous and current tenures in the Kremlin? To assess the future as well as to understand Putin’s power and popularity, this brief starts by looking back at the economic developments in Russia since Putin first became president.

Although many different factors enter the power and popularity function of Putin, economic developments have a special role in providing the budget constrain within which the president can operate. A higher income level means more resources to devote to any particular sector, project, voting group or power base. This is not unique to Russia, but sometimes forgotten in discussions about Russia, that often instead only focus on military power or control of the security apparatus and media. These are of course highly relevant dimensions to understand power and popularity in Russia, but so is economic development, particularly in the longer run.

Russia’s economy in the world

The economic greatness and progress of a country is usually assessed in terms of the size of the economy, how much growth that has been generated, and how well off the citizens are relative to the citizens of other countries. So, by our common indicator gross domestic product (GDP), has Russia become a greater and more powerful country since Putin first became president? Table 1 shows two things, the absolute level of GDP measured in USD at market exchange rates and the rank this gives a country in a sample of 192 countries in the world that the IMF collects data on (this brief is too short for a long discussion of the most relevant GDP measure, but GDP at market exchange rates makes sense when comparing the economic strength of countries in a global context, Becker 2017 provides a discussion of alternative measures as well). When Putin become president for the first time in 2000, the value of domestic production was estimated at $279 billion, which implied a 19th place in the world rankings of countries’ GDP. In 2016, almost three presidential terms of Putin later, Russia’s GDP had increased by 4½ times to $1281 billion and its ranking improved to 12th place in the world. This clearly is an impressive record by most standards. However, the Russian economy is still the smallest economy of the BRIC countries and corresponds to only 7 percent of the US economy in 2016. In other words, impressive progress by Russia but the country is (still) not a global superpower in the economic arena.

Table 1. Russia in the world (GDP in USD bn)

Source: IMF (2017)

For the average Russian, income per capita is a measure more closely connected to consumption and investment opportunities or ‘welfare’. Progress in this area is also more likely to affect how individuals assess the performance of its political leaders. Of course, progress in terms of overall GDP and GDP per capita is closely linked unless something unusual is happening to population growth. Therefore, it is not surprising that GDP per capita also increased by around 4½ times between 2000 and 2016 (Table 2). This is the first order effect of the economic development in Russia, but in addition, citizens of Russia moved up from a world income rank of 92nd to 71st. This has implications when Russian’s compare themselves with other countries and can in itself provide a boost of national pride.

It also directly affects opportunities and status for Russians visiting other countries. Being at place 71 may not be fully satisfactory to many, but we should remember that due to the rather uneven income distribution in Russia, many of the people that travel abroad are far higher up on the global income ranking than what this table indicate. Nevertheless, Russia is far behind the Western and Asian high-income countries in terms of GDP per capita. And although the picture would look less severe if purchasing power parity measures are used, the basic message is the same; Russia has still a lot of catching up to do before its (average) citizens enjoy the economic standards of high-income countries.

Table 2. Russian’s in the world (GDP/capita)

Source: IMF (2017)

The macro scorecard of Putin

So what generated the impressive 4½ times increase in income in USD terms from 2000 to 2016 and can we expect high growth during Putin’s next six years in office? The short answer to the first question is the rise in international oil prices and to the second question, we don’t know. Table 3 provides a comparison of different economic indicators for Putin’s two first terms in office compared with his current term (where GDP data ends in 2016 so the sample is cut short by a year). It is evident that the impressive growth over the full period is entirely due to the strong growth performance in the first two presidential tenures. Rather than generating growth in the most recent period, the economy has shrunk. This is explained by the evolution of international oil prices, which quadrupled in the first eight years and instead halved in the more recent period. These swings in oil prices have also been accompanied by significant shifts in foreign exchange reserves, the exchange rate, and the value of the stock market.

In Becker (2017) I discuss in more detail the importance of international oil prices in understanding the macro economic development in Russia. In particular, it is important to note that it is changes in oil prices that correlate with GDP growth and other macro variables and that the problems with predicting oil prices makes it very hard to make good predictions of Russian growth.

Table 3. A macro scorecard of Putin in office

Source: Becker (forthcoming)

Policy conclusions

To break the oil dependence and take control of the economic future of Russia, the president will need to implement serious institutional reforms that constitute the basis for a modern, well-functioning market economy in his next term. Otherwise, Russia will continue to be hostage to unpredictable swing in international oil prices and nobody—including the president, the central bank, the IMF and financial markets—will be able to predict where the Russian economy is heading in the next couple of years.

Figure 1. Reforms (still) needed

Source: World Bank (2017)

In the longer run, the prediction is much easier. With the world moving towards a green economy, the price of oil will see a structural decline that will rob Russia (and other oil exporters) of most of its export and government revenues. The reforms which basically every economist agree are needed are related to market institutions and Figure 1 provides a clear illustration of key reform areas. The progress during Putin’s years in office has been modest at best. Swedish institutions in 2016 have been added to the figure as a comparison and it is clear that the institutional gap between Russia and Sweden is significant. Of course, all countries are different, but Russian policy makers that are interested in reforming its economy are most welcome to Sweden for a discussion of what we have done to build our institutions.


  • Becker, T. (2017). ‘Macroeconomic Challenges’, in Rosefielde, S., Kuboniwa, M., Mizobata, S. and Haba K. (eds.) The Unwinding of the Globalist Dream: EU, Russia and China, Singapore: World Scientific Publishing.
  • Becker, T. (forthcoming), ‘Russia’s economy under Putin and its impact on the CIS region’, Chapter 2 in T. Becker and S. Oxenstierna (eds.) Perspectives on the Russian Economy under Putin, London: Routledge.
  • IMF (2017), World Economic Outlook database, April 2017 edition available at http://www.imf.org/external/pubs/ft/weo/2017/01/weodata/index.aspx
  • World Bank (2017), Worldwide Governance Indicators (WGI), 2017 update available at http://info.worldbank.org/governance/wgi/index.aspx#home

Is War Good for a Country’s Political Institutions?

Author: Tom Coupe, KSE.

Recent research suggests that experiencing war violence might make people more likely to turn out during elections. Using data from the conflict in Eastern Ukraine, we show, however, that people who were injured or had close friends or relatives killed or injured were less likely to turn out at the 2014 parliamentary elections. We also show that the impact of violence on turn out and political views depends on the type of violence one experienced.

The Arab Spring Logic of the Ukrainian Revolution

20140331 The Arab spring logic of the Ukrainian revolution Image 01

Motivated by the unusual patterns and dynamics of the Arab Spring, we construct a model explaining the vulnerability of the newly established incumbent to popular unrest. Using this model for the case of similar protests in Ukraine, we find that the current combination of availability of information, military capacity of the incumbent and his radicalization, together with the opportunity costs of participation in a protest, are likely to result in the formation of new government that is also vulnerable to popular protests. The persistence of the protests after the formation of a temporal government in Ukraine supports this hypothesis. Additionally, as the policy position of Viktor Yanukovych was relatively mild, his potential successor might be more radical. Exponential growth of social media users, reduction of military capacity, relatively high unemployment and the possible radicalization of the Ukrainian President might put the country into an “instability zone” with recurrent protests.

On the night of 21 November 2013 spontaneous protests erupted in Kiev, the capital of Ukraine, after the Ukrainian government suspended preparations for signing an Association Agreement and a Free Trade Agreement with the European Union in favor of agreements with Russia. The movement concentrated on Independence Square (Maidan Naseljenosti) soon took on the name “Euromaidan”. Soon the protest spread to other cities in the country. The initial agenda of closer relations with the EU was soon encompassed in the wider protest against Viktor Yanukovych, elected President in 2010. He fled the country on February 21 under the pressure of popular protests, exacerbating the leadership crisis. Temporary leadership was taken up by the Speaker of the Supreme Rada – Oleksander Turchinov, while new elections were scheduled to take place on May 25.

Despite the successful removal of Victor Yanukovich from power and a promise of new elections in May, the protests on Maidan did not cease. The major factor of uncertainty comes from the very nature of the protests. For many months, it ran without organizers or formal leadership so that the future course of action remains unclear. It is hard to comply with the demands of Maidan, as no clear set of demands are formulated. Though five figures of Maidan: Tymoshenko, Klitschko, Tyagnybok, Yatsenuk and Yarosh remain the most visible, none of them has sufficient support of Maidan. Whichever course prevails – resumed Eurointegration or an alliance with Russia (which became a less likely option)– the number of people who oppose the new course is likely to be enough to fill a new Maidan.

The swift happenings in Maidan are highly reminiscent of the events of the Arab Spring at its crux: it also was a leaderless protest, coordinated mainly with social media, and encompasses people of vastly different socio-economic, political and demographic characteristics.

Using social media technologies, Euromaidan has created an interactive map of logistics (http://maydanneeds.com/) that provides detailed information on and locations of where to eat, makeshift hospitals, information booths, and the barricades. Clicking on the icons of the map, one discovers not only the locations of the facilities but also their needs, which enables coordination of protesters’ efforts to contribute to the common cause. However, just as in case of Tahrir Square or the Tunisian unrest, the common cause is poorly defined: aside from dissatisfaction with Viktor Yanukovych, the protesters exhibited very different preferences for the future course of action, and the three most prominent figures of the protest – Klitschko, Tyagnybok and Yatsenuk – were shunned as they spoke about the common agenda.

The aftermath of the Arab Spring remains unclear for both protesters and the world. The Syrian social unrest has resulted in ongoing violent conflict, while Libyan society still experiences serious problems with the formation of a new government after the murder of Kaddafi and the end of civil war. Tunisia and Egypt were able to choose new Presidents and form new governments. The latter were themselves dismissed soon after they came to power: the first elected post-Mubarak government collapsed in mid-2013 after a year of almost uninterrupted protests. These two cases are especially interesting as constitutional exits of leaders who were in autocratic office for less than one year were generally caused by coups and not protests between 1945 and 2002 (Svolik, 2009).

Nevertheless, we can apply the knowledge acquired there to the new Ukrainian protest we observed on Maidan and try to predict its development by the means of stylized models suggested in Dagaev, Lamberova, Sobolev and Sonin (2013).

Our approach relies on four simple parameters that drive the dynamics of the protests. First, we consider the costs of collective action – the opportunity costs of spending time on Maidan. The second parameter is the military capacity of the incumbent that can be devoted to the suspension of the protest. The higher it is, the more numerous should the protest be to succeed. The third parameter we use is the degree of the radicalization of the incumbent (the difference between his position and the preferred policy of the majority of the population). Finally, we use an information availability parameter (how many people are aware of the place and time of the occurrence of the protest).

With the electric telegraph, a communication tool of the 19th century, information availability was low and many of those who would have been glad to pay the costs of collective actions to replace the incumbent stay at home as they are not aware of the protest taking place. With Facebook and Twitter, the availability of information is much higher. According to our findings, the crucial role in dynamics of contemporary mass actions is played by the ratio of military capacity to the information availability rather than their values per se.

Our framework assumes that each citizen’s decision of whether to participate in the protest or not is based on the difference between her position and the preferred policy of the incumbent. According to this decision, all citizens can be classified into two groups – those who participate in a protest against the incumbent, and those who do not. We define a person, who has the median position among the protesters, as the expected new incumbent. So if the elections were held among the protesters, he would receive the widest support. If the number of citizens participating in the protest is sufficient to overcome the military capacity of the current incumbent, the protest becomes successful, and the expected new incumbent of the protest becomes the new incumbent. The combination of military capacity, opportunity costs and costs of coordination determine the size of the stability zone – a segment of policy space where the incumbent is not vulnerable to mass protest.

The model allows us to predict the dynamics of the protests that is generated by different combinations of the parameters. For illustrative purposes, the availability of information about the protest is proxied by data on Facebook penetration and military capacity is described by the number of military personnel per capita in 2009 collected by the International Institute for Strategic Studies (Hackett, 2010). The incumbent policy position is proxied by the Legitimacy Index from Polity IV, where a higher index corresponds to lower legitimacy of the incumbent and his regime. Finally, the costs of participation in a protest are proxied by the employment rate. A recent study by Campante and Chor stresses unemployment as important determinants of opportunity costs of taking to the streets during Arab Spring (Campante & Chor, 2012). As unemployed individuals have fewer options of how to spend their time, one should expect that a substantial number of unemployed people corresponds to a relative ease of sparking unrest.

Using these parameters, we can explain success or failure of the protest, and predict some proprieties of its aftermath.

For example, high military capacity, opportunity costs and costs of coordination generate a broad stability zone, so that even a radical incumbent would not face a threat of revolution. The decline of any of three parameters can narrow the zone of stability and make the autocrat vulnerable to mass protest. As the incumbent is highly radical, a significant part of the population takes to the streets. As a result, the new incumbent’s position is sufficiently close to the one of the median voter and is, thus, inside the stability zone. An example of such a scenario is the overturn of Slobodan Milosevic after the fall of communism, when there were eight failed and one successful attempts to form a wide coalition of opposition parties (Spoerri, 2008). The process of finding a common ground started in 1990 with the emergence of the coalition of six parties, the Associated Opposition of Serbia, which broke shortly after a series of power struggles, policy disagreements, and personality clashes. It was only ten years later that the protest which facilitated Milosevic’s downfall took place, as the leader of the united opposition, the Democratic Opposition of Serbia, was able to ensure the non-involvement of the crucial military unit on behalf of Milosevic (Bujosevic & Radanovic, 2003).

In contrast, the events of the Arab Spring had different political dynamics. Low military capacity and high unemployment of Egypt and Tunisia determined a narrow stability zone ex ante. The absence of protests of these long-lived regimes can be explained by the relatively moderate position of the incumbent. In 2010, the Egyptian and Tunisian regimes had scores of 5 and 4 (out of 12) of Political Legitimacy from Polity IV, respectively. However the emergence of social media that enabled the users to coordinate their actions easily narrowed the relatively small stability zone. As the incumbent was less radical, fewer citizens benefit from its replacement and take to the streets. Thus, the new incumbent is defined by protesters, her policy position is more radical and now is out of the stability zone. The new incumbent immediately faces the new social unrest.

Table 1 presents the stylized results of our study. Locating the combination of parameters of the country in the table allows us to make the prediction about the dynamics of the protest. There are several possible courses of events: the protest can be weak and die out soon, with the incumbent staying in place; it can be significant, but yet not large enough to overthrow the incumbent; it can lead to the replacement of the incumbent, followed by the period of stability; and, finally, it can result in the replacement of the incumbent, but not cessation of the protest.

Table 1. Protest Outcome as a Function of Parameters

What do our findings tell us about Ukraine? The previously used proxy for the information index there is not a good choice, as the majority of users prefer the Russian version of Facebook – Vkontakte – as the major social network of the country. Thus, we rely on the Vkontakte penetration data (as of 2013, 18.5 million of people in Ukraine were using the network, constituting 40.6% of the population, see report of Ukranian IT-news agency AIN.UA: http://ain.ua/2013/11/28/503853).

The military parameter, that reduces the likelihood of successful protest, is low, compared to the countries of Arab Spring and constitutes 2.8 active military per 1000 people (see the Ukrainian law “Armed Forces of Ukraine for 2013”, http://w1.c1.rada.gov.ua/pls/zweb2/webproc34?id=&pf3511=49126&pf35401=283834), which is half of the one in Egypt at the beginning of the protests. The unemployment parameter fell to 8.6 during the incumbency of Victor Yanukovych, which corresponds to the pre-protest unemployment in Egypt in 2010.

The legitimacy measure presents a difficulty for comparison with the Arab Spring cases, as the Legitimacy Index has not yet been updated. However, the harsh actions of Victor Yanukovych during the 2013-2014 protests (including the suppression of the protest and the passage of laws denying freedom of assembly and freedom of expression, as well as the refusal to repeal his earlier changes of the constitution towards more presidential form of government) suggest that his legitimacy level fell by approximately 50% (and was about 20% right before he was ousted from power), which is corroborated by polls (“Ukraine’s future in peril under President Yanukovych”, The Washington Post, 2 December, 2013). Thus, the conservative estimate is that his legitimacy index shifted from 3 to 4 or 5, as shown on Figure 1.

For the purpose of comparison, we plot the Arab Spring countries and Ukraine in the space of our variables in Figure 1. The X-axis shows the incumbent’s departure from the median population-preferred policy (proxied by the Legitimacy Index from Polity IV). We use the value of the index in the year prior to the start of unrest, and the index value in 2010 for countries with no protests (Morocco, Oman, Djibouti). The Y-axis corresponds to the employment level. The size of the bubble corresponds to the ratio of military capacity and Facebook (or Vkontakte) penetration (data from the Arab Spring Social Media Report).

The shading of the bubble reflects the type that country belongs to: striped (no significant protest), light gray (continuing protest), and dark grey (multiple protests). Syria is excluded from the classification and is marked white, because of the civil war and international intervention.

Figure 1. Legitimacy index (X-axis), Employment (Y-axis), Military capacity / Social media penetration (size of the bubble) in Arab Spring countries and UkraineFigure 1

Figure 1 illustrates that countries appear in tight clusters in line with our theoretical predictions. The countries with continuing protests that did not lead to the downfall of the incumbent are divided into two groups. The first group (Kuwait, Jordan, Lebanon, and Bahrain) has relatively a moderate incumbent policy position and extremely high level of development of new media. The reasons why these countries are not «striped» is high military capacity of the government that could be employed against protesters, combined with high opportunity costs of protesting (low unemployment rates).

The second group of countries (Syria, Algeria, Iraq, Yemen, and Mauritania) has more radical incumbents and higher unemployment rates (so the incentives to protests are higher there), but is poor in terms of IT development. The ratio of military capacity and Facebook (Vkontakte) penetration is high, which is reflected by the size of bubbles that are much larger than in the first groups. That is why in a country with a small military capacity (such as Yemen), the protests did not lead to the incumbent’s replacement.

Two Arab Spring countries belong to the “multiple protests” group. Both Egypt and Tunisia had relatively mild incumbents in the pre-protest era, with Tunisia’s Bashar al-Assad being the milder of the two. Both countries had relatively high unemployment rates and wide Facebook coverage, both factors alleviating the problem of organizing a collective action. Despite the fact that before the start of the protests Facebook coverage in Egypt had close to average values among the countries of Arab Spring, they grew at exponential rates and Egypt attained leading positions in the region in usage of new media several months later. Moreover, low rates of military capacity made protest activity less risky in both Tunisia and Egypt. The remaining differences in Facebook coverage and employment rates in Egypt and Tunisia account for the different structure of recurrent protests, predicted by our model.

Comparison of the Arab Spring countries data with the Ukrainian case shows that high military capacity, new media penetration and unemployment generate even more narrow stability zones than one observes in the cases of Egypt and Tunisia. The reason why the incumbent was not vulnerable to mass protests can be explained by the political legitimacy of Yanukovych as the winner of relatively free elections in 2010.

But if the Arab Spring protests were triggered by rapid growth of new (cheap) communication technologies, the successful protest against Yanukovych can be explained by his radicalization. The radicalization took the form of parliamentary acts that put significant constraints on political rights and civil liberties and violent suppression of dissident actions.

Employing the proposed approach and contrasting the Ukrainian case with the countries of the Arab Spring allows us to draw several conclusions.

Firstly, the current combination of availability of information, military capacity of the incumbent and his radicalization, together with the opportunity costs of staying on Maidan, are likely to result in successful and recurrent protest. The persistence of the protests after the formation of a temporal government supports this hypothesis.
Secondly, it is worthwhile to note that as the policy position of Viktor Yanukovych was relatively mild, his potential successor might be more radical.

Thirdly, the exponential growth of social media, the reduction of military capacity and relatively high unemployment puts Ukraine into an “instability zone”. This implies that the 2004 scenario of the Orange Revolution is unlikely to repeat. The protest of 2004 resulted in a general election, and the elected president Viktor Yushchenko served his term without interruption. The protests of 2013 are more likely to result in a rapid change of incumbents and a period of instability.

One factor can strengthen the possible incumbent’s vulnerability. The external pressure of the Russian government reduces costs of collective resistance to the new Ukrainian authorities among pro-Russian citizens, while the promise of Western countries to support fast EU integration can incentivize politicians to accelerate reforms opposed by significant parts of the population.


  • Bujosevic, D., & Radanovic, I. (2003). The fall of Milosevic: the October 5th revolution. Palgrave Macmillan.
  • Campante, F. R., & Chor, D. (2012). Why was the Arab world poised for revolution? Schooling, economic opportunities, and the Arab Spring. The Journal of Economic Perspectives, 167–187.
  • Dagaev, D., Lamberova, N., Sobolev, A., & Sonin, K. (2013). Technological Foundations of Political Instability. Centre for Economic Policy Research Working Paper Series
  • Hackett, J. (2010). The Military Balance 2010: The Annual Assessment of Global Military Capabilities and Defense E conomics. London: The International Institute for Strategic Studies.
  • Spoerri, M. (2008). Uniting the opposition in the run – up to electoral revolution – Lessons from Serbia 1990 – 2000. Totalitarismus Und Demokratie, 5(2005), 67–85.
  • Svolik, M. (2009). Power sharing and leadership dynamics in authoritarian regimes. American Journal of Political Science, 53(2), 477–494

A Resonant Signal: the Russian Parliamentary Elections of December 2011

FREE Network Policy Brief | A Resonant Signal: the Russian Parliamentary Elections of December 2011

Days before December 4, prospects of electoral democracy in Russia looked bleak. Consolidation of the authoritarian rule of Vladimir Putin, Russia’s paramount leader since 1999, adoption of non-democratic electoral laws and politically-motivated law enforcement, constant harassment of media, civil society organizations, and election observers, and outright involvement of the government in the electoral process gave little hope that elections would make the political leadership accountable. The courts and electoral officials were used to prevent most opposition leaders from registering a party or participating in elections; opposition financial supporters had been driven into exile. Parliamentary elections in December 2007 and presidential elections in March 2008 were marred by such irregularities that many observers, myself included, had stopped counting. However, the outcome of December 4, 2011 will arguably have a major impact on future political developments in Russia.

Firstly, the official results of United Russia, the party that is led by Vladimir Putin and had a constitutional majority in the previous parliament, showed a significant drop in support for the current political leadership among the general public. Despite overwhelming presence on state-controlled TV channels, significant support by government officials, and outright vote fraud, the official results show the ruling party deserted by more than a quarter of its supporters (12.8 million out of 44.7 million who voted for United Russia in 2007).

Secondly, those who turned out to vote (the turnout was significantly lower than at previous parliamentary elections) showed obvious discontent with Putin/United Russia policy and, possibly, with the way elections were conducted. In particular, millions of Russians voted for Just Russia, a party with no charismatic leader and a platform that is not substantively different from that of United Russia.

Thirdly – and perhaps most importantly – there was a visible and dramatic upsurge of voter activism on the Election Day. Without any large-scale centrally organized campaign, hundreds of volunteers went to polling stations to work as election observers. They witnessed, prevented and/or reported hundreds of violations by electoral officials via social networks (despite coordinated DDoS attacks on the most important networks and popular news sites on the Election Day) and via You Tube. By December 5, some of the You Tube clips showing electoral fraud had more than 1,000,000 hits.

Reported Results and Corrections for Voter Fraud

As is always the case in a semi-democratic state, result of the official count may deviate significantly from how people actually voted. In Russia, the parliament is formed by representatives of political parties: voters vote for party lists, rather than for individual candidates. The officially announced results were: 49.5 percent for United Russia, 19.2 for Communist party, 13.2 for Just Russia, and 11.7 for the Liberal Democrats (Vladimir Zhirinovsky). Other parties, including Yabloko, the only liberal-leaning party that was allowed to participate in elections, fell short of the 7 percent required to enter parliament. However, the observations of international observers concur with those of opposition parties and independent Russian observers: ballot stuffing in favor of United Russia was witnessed/recorded and was widespread; electoral laws, draconian in themselves, were grossly violated by state officials, including police, at polling stations. In a number of cases, the elections results certified by local election boards do not coincide with the data presented by the central electoral commission, with every major discrepancy being in favor of United Russia.

Results obtained by the Citizen Observer project, which brought about 500 Moscovites to 160 polling stations as observers, give an impression of the scale of the fraud. Unfortunately, the project did not use a randomized distribution of observers, which would make the sample statistically representative of the whole of Moscow. However, Moscow districts have demonstrated fairly homogenous voting patterns in the last two decades, and there is no reason to think that any major change in this pattern occurred, so the report offers a fairly reliable estimate of election fraud. Averaging across polling stations where the observers did not report any serious violations, the Communist party won 25.3 percent of votes, United Russia 23.4, Just Russia and Yabloko 17.6 percent each, and the Liberal Democrats 12.5 percent. Turnout was 49 percent.

I would therefore estimate the effects of irregularities at 10 percentage points, i.e. the real share of votes cast for United Russia nationwide would be 39 percent rather than the reported 49 percent. But it would be reasonable to suppose the effect of irregularities at between 7 and 15 percentage points, so real votes for United Russia would be between 34 and 42 percent of votes cast. It is conceivable that the real share of votes cast for the Communist Party in Moscow (19.4 percent in official returns) was close to that of United Russia; it is not inconceivable that the Communists won the majority of real (not “counted”) votes by Moscovites.


Following such a major surprise, any explanation offered only three days after the event risks being way off mark. Public opinion surveys predicted a significantly larger plurality for United Russia. (Personally, I have doubts about the quality of surveys of electoral intentions by major Russian polling firms. I find it particularly disturbing that, in the past, such firms have proved good at predicting – supposedly based on voter intentions – the reported results, rather than the results as adjusted by a realistic estimate of electoral fraud.)

The most obvious explanation for the United Russia setback is economic. Russia suffered more than any other G20 country as a result of the world financial crisis in 2008-09: an EBRD Transition Report 2011 found, based on an extensive survey of Russian citizens, that 38 percent of households had to cut their food consumption as a result of the crisis (11 percent of West European households were affected the same way). This is a major impact. In a democracy, such economic impact alone would most probably result in loss of power for the incumbent leadership.

Another explanation is growing discontent among Russians with the harshness of Putin’s administration and with rampant corruption. When oil prices were rising and real incomes were growing by double digits, the Russian public exhibited markedly high tolerance even when political decisions ran contrary to the will of the majority (for example, no opinion survey in five years showed majority approval of the abolition of regional gubernatorial elections, which was a cornerstone of Putin’s political changes) or when they had to pay substantial corruption premiums in the marketplace. In harder times, people are less willing to have their wishes ignored or to tolerate high and rising prices.


In the Yeltsin era, such an outcome of parliamentary elections (even by the official count, United Russia lost almost 13 million votes as compared to 2007) would have triggered a major change in the composition of the cabinet. In 2011, there is even more reason for such a change: a number of prominent cabinet members, who had remits to run United Russia slates in specific provinces led their slates to dismal results (low 30s by the official count). However, low mobility in the upper echelons of the Russian elite during the last decade suggests that drastic changes in the near future are unlikely.

More important than the loss of seats in parliament for United Russia is the possibility that Vladimir Putin, the current prime minister with de facto presidential powers and the head of United Russia, is no longer assured a safe victory in March 2012 presidential elections, which looked a foregone conclusion just a couple of months ago. He is still arguably the favorite, even if (very improbably) there is no ban on opposition candidates participating in the elections (in 2008, the field was restricted to three contenders, all of them effectively pseudo-candidates; in 2004, other candidates were de facto prohibited from raising money for the campaign, while the incumbent had the full capacity of the state at his disposal). With a ban on opposition participation, he is the overwhelming favorite. However, we do not rule out an initiative by the government to make outcome of presidential elections even more secure in the near future by a major crackdown on the opposition.

Polish Pre-Election Polls Seem Unmoved by Electoral Giveaways

20191231 Default Image 01

As in every election, numerous electoral pledges have been made prior to the election that will take place in Poland on the 9th of October. It seems however, that support for different parties has remained largely unaffected by the scale of the giveaways.

As in every elections, numerous electoral pledges have been made prior to those that will take place in Poland on the coming Sunday, the 9th of October. It seems, however, that support for different parties has remained largely unaffected by the scale of the giveaways.

As the elections get nearer, the electoral race between the main contenders, the ruling Civic Platform (PO, popular support at about 32%) and the main opposition party Law and Justice (PiS, 29%), seems to be getting closer, with the result of Sunday’s vote remaining wide open. Behind the two leaders in opinion polls are the Polish People’s Alliance (PSL, 5%) which has been in coalition with PO for the past four years, and the Democratic Left Alliance (SLD, 10%) together with two recently formed parties – Palikot’s Movement (RP, 8%) and Poland is Most Important (PJN, 2%). To guarantee seats in the parliament any of the parties need to cross the 5% support threshold.

In the second part of its Pre-election Report published on 28th of September, the Centre for Economic Analysis (CenEA) presented a detailed analysis of electoral proposals focused on tax and benefit policies which would directly affect the financial situation of Polish households (Myck, et al., 2011a).

The two coalition parties (PO and PSL) have approached electoral declarations with surprising modesty by either fuzzy non-specific commitments (like the PSL) or electoral slogans which sound generous but are in fact relatively cheap to implement. The Civic Platform promised a “radical increase in the tax credit for the third and subsequent children in the family”. As the Report shows this would only affect about 30% of “3+” families or about 5% of all Polish families, and would cost only about 70m euro per year (0.02% of the GDP) – a burden that may be possible to bear even at the difficult times of the crisis.

The opposition parties are much more generous with PiS and SLD both offering to increase pensions and broaden eligibility criteria for family benefits. These policies in each case would cost about 1,5 billion euro (0.5% of the GDP). On top of that the SLD proposed a new benefit for low income families who cannot take advantage of the existing child tax credit. This policy would stretch the government’s budget further by another billion euro. Neither of the two parties suggest convincing ways of financing of the proposals and they are both adamant that they would not raise taxes.

The most stunning proposals came from the recently formed PJN, a party established after last year’s presidential elections by former members of PiS close to the late President Lech Kaczyński. PJN’s program promises extremely generous additional resources for families with children. When put together with additional proposals of changes in personal taxes, and minimum pensions the overall cost of the giveaways adds up to about 17bn euro, or about 5% of the GDP. Some of the resources for this purpose would come from introducing a uniform rate of the VAT, but the full package still leaves a hole in of about 12 billion euro (3.7% of the GDP). This cost seems impossible to pay at the time when the government is struggling with a very high level of debt and desperately tries to reduce the budget deficit.

The recent discussions concerning the parties’ spending plans may be one of the reasons behind the narrowing of the gap between PO and PiS, but other more generous electoral promises of other parties – do not seem to have caused much change in support. In fact, the party which has recently gained most in the polls (RP) is the only one which, with its suggestion of linear income tax and a uniform VAT rate – both at 18%, would significantly raise household taxes by nearly 3% of the GDP.

Such outcome may be interpreted in many different ways. First, it might relate to the failure of parties to clearly explain which population group would gain once the proposed changes get implemented. Secondly, the public opinion may generally have poor understanding of consequences of different solutions. It must be said that for a long time the campaign focused much more on personalities and several general issues than on specific details and proposals in the area of taxation or social support. Moreover, as demonstrated in the first part of CenEA’s Pre-election Report (Myck et al., 2011b), the ruling parties over the last two terms of parliament have generally failed to deliver their earlier promises related to tax and benefit policy. This may have made voters skeptical of what has been announced this year. The slogan that “no one will give you more than the politicians will promise” has been very popular in Poland over the recent weeks. Such slogans get reinforced by the fact that parties fail to identify convincing sources of funding for their new policies.

Politicians who want their promises to be taken seriously must realize that any proposed additional expenses may only be financed by extra taxes or through credible solutions concerning savings. The experience of this year’s campaign in Poland shows that until both sides of the equation are taken seriously by the parties, voters won’t pay too much attention to what is announced.


Myck, M., Morawski, L., Domitrz, A., Semeniuk, A. (2011a) „Raport Przedwyborczy CenEA, część I. Wybory parlamentarne 2011: kto zyska, a kto straci i ile to będzie kosztowało?” (CenEA’s Pre-election Report. Elections 2011: who will gain, who will lose and how much it will cost?), Microsimulation Report 02/11, Centre for Economic Analysis, Szczecin.

Myck, M., Morawski, L., Domitrz, A., Semeniuk, A. (2011b) „Raport Przedwyborczy CenEA, część I. 2006-2011: kto zyskał, a kto stracił?” (CenEA’s Pre-election Report: 2006-2011 who gained and who lost? ), Microsimulation Report 01/11, Centre for Economic Analysis, Szczecin.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.