Financial Constraints on the Modernization of the Russian Economy

Richard Connolly

Research output: Contribution to journalArticlepeer-review

29 Citations (Scopus)


A British economist examines the main obstacles to economic modernization in the Russian economy. After arguing that increased investment is required if the Russian economy is to undergo significant modernization, he presents a framework for identifying binding constraints on such investment. A number of popular explanations of Russia's persistent underinvestment are considered, with particular emphasis on financial constraints. Recent Russian government proposals to restructure the financial system are then assessed in light of their implications for the wider economic modernization. On the basis of the growth diagnostics framework employed in the paper, the author makes the case that the binding constraint on investment in Russia is the poor quality of domestic financial intermediation. Journal of - Economic Literature, Classification Numbers: E220, E500, F210, G200, O160. 5 figures, 9 tables, 83 references.
Original languageEnglish
Pages (from-to)428-459
JournalEurasian Geography and Economics
Issue number3
Publication statusPublished - 1 Jun 2011


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