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By Gustavus Myers

Half III: the good Fortunes from Railroads

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Russia was almost in category of its own. There was a realization that the process would take longer, and would require a much greater emphasis on technical assistance and institution building than would normally be the case. In tandem with fragile institutions, poorly trained officials, a lack of market signals, and little political will, it was also understood that IMF financial support would have to be considerably greater than could be provided under normal procedures, and yet the accompanying policy conditionality, at best, could not be too demanding.

Most of the members of a special commission in the Russian Supreme Soviet (parliament) were quite skeptical of the advice of the so-called Harvard boys, who favored immediate price liberalization. The Harvard boys, fielded by Harvard’s Institute of Development Economics, were among the earliest foreign advisers to the Gaidar government, and notably included Jeffrey Sachs, David Lipton, Jonathan Hay, and Andrei Shleifer. An additional problem was that the commission’s time and effort were dedicated to organizing food convoys to Moscow and other places where hunger loomed menacingly close.

An Independent Russia Emerges from the Detritus of the USSR Too many people, who perhaps should have known better, expected the independent Russia emerging from the debris of the Soviet Union to become a normal country rapidly. To their credit, this was a pattern that had already been observed in the other transition economies in the 1980s. These unrealistic expectations, fed by Russian and Western political leaders, set goals and even standards of behavior that could only lead to disappointment and frustration on both sides.

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