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Russia: U.S. Experts Differ On Reform Program

A debate between two top Harvard experts on Russia has revived the controversy over what went wrong with foreign advice and the country's reforms. RFE/RL's Michael Lelyveld reports.

Boston, 27 June 2000 (RFE/RL) -- Harvard economist Jeffrey Sachs defended his reform prescriptions for Russia during a debate Monday with fellow-economist Marshall Goldman, as both experts lamented the pace of progress over the past eight years.

Sachs, who served as the leading economic adviser to the Russian government in 1992 and 1993, has frequently come under fire for the reforms that he helped to design, although his program for neighboring Poland has proved largely successful.

The attempt to adapt the Polish experience to the different culture of Russia has been most often cited as a failure of foreign advisers like Sachs.

Russia's early reform efforts under then-Acting Prime Minister Yegor Gaidar are now widely seen as a patchwork program, because some measures were implemented while others proved politically impossible.

In the debate entitled "Who Lost Russia?" at Harvard's John F. Kennedy School of Government, Marshall Goldman was frank about the faults of such an approach.

Goldman said: "After 70 years of attacking capitalism, of attacking markets, it was unrealistic to expect that the system would absorb this change. To give such advice under those circumstances, it seems to me, was wrong, and that deserves criticism."

Some features of the economic program, like land reform, have yet to be implemented because of political resistance. For years, Russia also remained subject to sudden massive devaluations of the ruble and pressures to print worthless currency, making reform unsuccessful and unpopular. Both Goldman and Sachs pointed to the theft of Russia's resources as a major factor in frustrating reforms.

For his part, Sachs accepted much of Goldman's criticism.

Sachs said: "Basically, I agree with 90 or 95 percent of what Marshall has said, and always did."

He said the difference is essentially one of attitude and motivation. Sachs compared himself to a doctor who had been called in to an emergency situation and was unwilling to let the patient die.

Sachs said: "My view was that it was worth the try." Sachs argued that he would have gone much further in his effort, believing that the United States should have committed as much as $50 billion in aid from the start to revive Russia. He noted that Gaidar's reform team lost power at the end of 1993 before Russia received a penny of aid.

The disagreements between Sachs and Goldman have been smoldering for years. As a leading Sovietologist, Goldman was largely excluded from the process of designing the early reform program for the Soviet Union at Harvard in 1991. Young economists who had far less experience in Russian studies, like Sachs, took over the task after the Soviet Union collapsed at the end of 1991.

Goldman was also candid in recognizing the resentments, noting that some Russia experts felt that they alone were qualified to give advice.

Goldman said: "That's what some of us were arguing, that you had to know the territory, as it were. And that meant that indeed this was our turf. Don't mess with it." Goldman conceded that "to some extent, it was sour grapes, jealousy on our part, no doubt about it." He also noted that some analysts had anti-Soviet reputations, saying, "There was reason for excluding those people with that kind of experience." But Goldman said there was no excuse for ignoring Russia's lack of institutions to carry out reform policies or for urging treatments that could not be followed. He carried the analogy of the patient further, saying that foreign advisers hoped they could awaken Russian market behavior as if it were a sleeping prince. But said Goldman: "The problem was that the prince wasn't sleeping. The prince was dead."

Sachs also tried to point to a number of other factors in the comparative success of countries like Poland. The biggest is geography, Sachs argued. He said proximity to a border with the European Union tends to promote investment and increase hard currency.