Doing Business Reforms in Russia - Winners and Losers

Abstract

In 2012, on the first day of his third term in office as president of the Russian Federation Vladimir Putin signed various decrees aiming at boosting Russia’s investment climate with the explicit goal of "creating a new economy" (Reuters, 2012) that is characterized by a more diversified and balanced structure. Within this context he stated the objective to improve Russia’s rank in the World Bank’s ease of doing business (short: doing business) indicator from 120th in 2012 to 50th by 2015 and 20th by 2018. (The Telegraph, 2012) Indeed, Russia achieved to boost its performance in the last four years being ranked 51st in the 2016 ease of doing business. In a first step, this article introduces the methodology of doing business and explains why this indicator is politically charged. Subsequently, we show that Russia’s improvement in doing business in the past four years was mainly driven by regulatory reforms in two sub-indicators. We discuss to what extent certain economic sectors benefitted from these reforms and come to the conclusion that they are more likely to maintain the current economic structure instead of creating a new, i.e. more balanced, one.