ABSTRACT

The basic dilemma of Russian economic policy during the post-Soviet years has been, and continues to be, that the winners do not find it rational to share their spoils by engaging in the payment of any serious amounts of taxes, customs or other contributions to the budget. At a cursory glance, it is easy to interpret this development as a manifestation of the classic prisoners’ dilemma. If others do not pay their taxes, I have little to gain from making a contribution on my own, and little to fear in the way of getting caught should I decide not to pay. Thus a negative self-reinforcing spiral is established.