ABSTRACT
Introduction This part of the book seeks to present the ways in which neoliberal theories on economic development and the nature of capitalism discussed in Part I underpinned reform programmes aimed at creating a market capitalist economy in Russia. It is particularly concerned with the effect neoliberal ideas about the role of law in post communist transition had on choices made by the Russian government after 1991, especially in relation to the articulation and protection of property rights and privatisation. Part II consists of two chapters. Chapter 3 presents the basic tenets of the socalled Washington Consensus, outlining how a set of abstract economic theories could be turned into a set of concrete proposals for economic and legal reform with global application. This chapter seeks to explore how ideas embodied in the Washington Consensus were embraced in western academic circles and adopted by government agencies involved in guiding Russia through the transition process. Particular emphasis is placed on perceptions of reformers regarding the role of law in the process of post communist transformation. It then examines the original reform plans devised in the USSR but abandoned in favour of imported neoliberal models that were eventually implemented by the Russian government after 1991. Here focus is directed in particular on the perceived importance of private property rights and the role of privatisation in shaping the political and economic landscape of post communist Russia. The chapter seeks to demonstrate how choices on law reform were directed by a specifically neoliberal mindset that viewed ‘the market’ as an independent, purely economic sphere of human activity, quite separate from the political sphere and removed from the society in which it operates. It concludes with a brief analysis of the alternative Chinese route towards capitalism with the aim of placing the Chinese example within debates about the optimum speed and sequencing of reform. Chapter 4 offers a critique of the promotion of ‘instant capitalism’ under the sponsorship of the Washington Consensus. It discusses responses to failures of implementation of rapid reforms in Russia, outlining three different strands of thought present in the literature: one defending the priorities of instant capitalism, one rejecting rapid reform altogether and one seeking to build on the alleged
foundations created by rapid reform by stressing the need for institutional or rule of law reforms to add to gains from the first stage of transition. In this context, failures of the original Washington Consensus model are highlighted, as by implication are the weaknesses of analyses and advice offered by the western experts involved. This discussion prepares the way for Part III and Chapter 5, which explores second stage reforms that began to gain theoretical prominence after 1996. The importance of Chapter 4 is that it shows revisions to the original reform plans, especially those focusing on the need to strengthen market institutions and the rule of law, can be interpreted as marking an erosion of the fundamental assumptions of neoliberalism. The recognition that much more is required to create a market economy than the mere introduction of private property rights, threatens to undermine a radically neoliberal theoretical model upon which the original Russian reforms were based; a model built on ideas that there exists an autonomous, market based economic rationality and that it is possible to construct an essentially apolitical economy in which law and state play strictly limited roles.
