Disagreements about economic policy within the Russian government often spill over into the public arena and get reported in the media to an extent which would surprise most people in such English speaking countries as Australia, the UK and the US.

In part, public exposure of internal government economic policy differences reflects less need for government discipline than when faced with an effective political opposition ever ready to attack (particularly as in the Westminster system used in Australia and the UK).

However, it is also partly a way of trying to influence the views of the president and prime minister. President Medvedev has, on occasion, had different views to Prime Minister Putin and has been quite insistent on specific economic measures (such as the payroll based insurance contribution and privatization) even if actual implementation of his demands has been tardy. It will be interesting to see the extent to which such public airing of ministerial differences (and those of official advisers) will continue when the roles of Medvedev and Putin are reversed: Putin will be calling all the shots with Medvedev (psychologically defeated by Putin in the unspoken contest to be the presidential candidate) having little independent authority.

I would also note that the public debates of economic policy by Russian ministers (and various official advisers) are often more sophisticated than what appears in the media of most “modernized” English speaking countries. The Russian system of appointing cabinet ministers is more akin to the US than to Australia or the UK and in the area of economics, at least, the result is often greater intellectual competency. Of course, as in any country, this does not necessarily mean that the final decision makers are competent economic policy makers.

Last week a Higher School of Economics (HSE) “conference” to discuss economic reform essentially turned into a mini-debate on budget issues between Elvira Nabiullina, the Minister of Economic Development, and Finance Minister Anton Siluanov.

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Expert Group 2, which is concerned with “Budgetary and monetary policy and macro-economic parameters for developing the Russian economy”, has been one of the least active of the 21 Groups. Budgetary and monetary policy can be quite technical issues and it is essential to get these right, but Group 2 might also consider helping the Ministry of Finance understand the PR side of macro-economic policy – after all, isn’t the idea of managing “inflationary expectations” really based on a PR stunt?

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Group 2 says it will focus on analyzing external economic conditions, as well as the budget (planned general parameters of budget, expenditures, and government debt) and monetary and credit policy. Questions of taxation policy, development of institutions and business-climate will be left to other Groups. This Group has so far produced only one document, so I will take it as reflecting the thinking of the whole group.

Jeff says that ….

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