Susanne Oxenstierna
Swedish Defence Research Agency, Defence Economics, Faculty Member
- Economic development, transition, institutions, Russia, defence economics, labour market, civil societyedit
After a focus on cost reductions for nearly twenty-five years, the Swedish Armed Forces are now facing a period when the defense budget will increase. The report identifies the current state of knowledge and the need for new research on... more
After a focus on cost reductions for nearly twenty-five years, the Swedish Armed Forces are now facing a period when the defense budget will increase. The report identifies the current state of knowledge and the need for new research on achieving value for of a higher defense budget. The report presents the results of an in-depth literature review and interviews with representatives from the Armed Forces. .
The reports formulates an analytical framework based on the concepts critical sectors and growth factors. Critical sectors refers to defined activities or sectors of the Armed Forces with priority of growth in combat forces and functions. Growth factors refers to factors that either hinder or promote organizational growth, such as the availability of staff and competences. The analytical framework is also illustrated with examples from the Armed Forces.
The study shows that the current state of knowledge about growth in public organizations is limited. It is concluded that the Armed Forces should invest in related research within the FoT-program. Such research should aim at strengthening the conditions for the operational capability in the long run and the conditions for short-term increases in defense production. Here, both concept and method development to handle the different time perspectives is important.
Keywords: FoT,
The reports formulates an analytical framework based on the concepts critical sectors and growth factors. Critical sectors refers to defined activities or sectors of the Armed Forces with priority of growth in combat forces and functions. Growth factors refers to factors that either hinder or promote organizational growth, such as the availability of staff and competences. The analytical framework is also illustrated with examples from the Armed Forces.
The study shows that the current state of knowledge about growth in public organizations is limited. It is concluded that the Armed Forces should invest in related research within the FoT-program. Such research should aim at strengthening the conditions for the operational capability in the long run and the conditions for short-term increases in defense production. Here, both concept and method development to handle the different time perspectives is important.
Keywords: FoT,
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After a focus on cost reductions for nearly twenty-five years, the Swedish Armed Forces are now facing a period when the defense budget will increase. The report identifies the current state of knowledge and the need for new research on... more
After a focus on cost reductions for nearly twenty-five years, the Swedish Armed Forces are now facing a period when the defense budget will increase. The report identifies the current state of knowledge and the need for new research on achieving value for a higher defense budget. The report presents the results of an in-depth literature review and interviews with representatives from the Armed Forces. .
The reports formulates an analytical framework based on the concepts critical sectors and growth factors. Critical sectors refers to defined activities or sectors of the Armed Forces with priority of growth in combat forces and functions. Growth factors refers to factors that either hinder or promote organizational growth, such as the availability of staff and competences. The analytical framework is also illustrated with examples from the Armed Forces.
The study shows that the current state of knowledge about growth in public organizations is limited. It is concluded that the Armed Forces should invest in related research within the FoT-program. Such research should aim at strengthening the conditions for the operational capability in the long run and the conditions for short-term increases in defense production. Here, both concept and method development to handle the different time perspectives is important.
The reports formulates an analytical framework based on the concepts critical sectors and growth factors. Critical sectors refers to defined activities or sectors of the Armed Forces with priority of growth in combat forces and functions. Growth factors refers to factors that either hinder or promote organizational growth, such as the availability of staff and competences. The analytical framework is also illustrated with examples from the Armed Forces.
The study shows that the current state of knowledge about growth in public organizations is limited. It is concluded that the Armed Forces should invest in related research within the FoT-program. Such research should aim at strengthening the conditions for the operational capability in the long run and the conditions for short-term increases in defense production. Here, both concept and method development to handle the different time perspectives is important.
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During Putin's third presidential term Russia's political leadership gave high priority to defence despite decreasing economi growth. Since 2017 there is a new trend of stagnating or decreasing military spending and a lower share of... more
During Putin's third presidential term Russia's political leadership gave high priority to defence despite decreasing economi growth. Since 2017 there is a new trend of stagnating or decreasing military spending and a lower share of defence in GDP. The chapter explores the trends in military spending and economic growth and concludes that the proposed economic policy for Putin's fourth term is not sufficient for generating higher growth. Military expenditure need to stay at the lower level in order to make room for expansion of other public spending.
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When sanctions are imposed they do not only affect the economy of the targeted country, they may also affect the economies of sender countries. This article investigates the effects on the export to Russia of the eight EU countries around... more
When sanctions are imposed they do not only affect the economy of the targeted country, they may also affect the economies of sender countries. This article investigates the effects on the export to Russia of the eight EU countries around the Baltic Sea between 2013 and 2017. The effects on total export for each country are studied as well as the effects on separate product groups according to the Standard International Trade Classification (SITC). It is found that export has fallen for all Baltic Sea countries but that the degree varies substantially. There is also great variation in how different product groups have been affected.
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Västs ekonomiska sanktioner mot Ryssland med anledning av den ryska aggressionen mot Ukraina 2014 har nu verkat i över fyra år. Målet med sanktionerna har varit att göra det kostsamt för Ryssland att fortsätta sin politik mot Ukraina och... more
Västs ekonomiska sanktioner mot Ryssland med anledning av den ryska aggressionen mot Ukraina 2014 har nu verkat i över fyra år. Målet med sanktionerna har varit att göra det kostsamt för Ryssland att fortsätta sin politik mot Ukraina och få Ryssland att lämna landet. Artikeln visar att sanktionerna har påverkat rysk BNP negativt men Rysslands politik mot Ukraina ligger fast. Ekonomiska sanktioner är ett instrument som används alltmer i internationella relationer för att signalera att ett land beter sig oacceptabelt eller bryter mot internationella konventioner. Men hur effektiva är sanktionerna?
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Russia’s military spending has more than doubled since the mid-2000s. However, after peaking in 2016, with a defence budget of 4.4 per cent of GDP, the government has planned a decrease in defence spending that would result in a share in... more
Russia’s military spending has more than doubled since the mid-2000s. However, after peaking in 2016, with a defence budget of 4.4 per cent of GDP, the government has planned a decrease in defence spending that would result in a share in GDP of 2.5 per cent in 2020. A review of the literature that discusses the rise in military expenditure indicates that it may be attributed to Russia’s security policy ambitions, military modernization, and the political priority given to defence. The reasons for the decrease in military spending in 2017, and during the expected decline 2018-20, may be linked to the poor economic performance, but political tactics prior to the presidential elections in 2018 are also part of the explanation.
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This book presents a comprehensive view of the state of the Russian economy under President Putin. It considers the extent of Russia’s integration in the world economy, where Russia’s exports of oil and gas are a key factor, discusses... more
This book presents a comprehensive view of the state of the Russian economy under President Putin. It considers the extent of Russia’s integration in the world economy, where Russia’s exports of oil and gas are a key factor, discusses Russia’s internal challenges, including changing demographics, declining government revenue, the need to counter over-reliance on the oil and gas sector and the consequences of high military spending, and assesses the prospects for economic reform, highlighting especially the power struggles between different vested interests. Overall, the book provides a basis for understanding what has been going on in the Russian economy under President Putin and what the future may look like given the external environment, internal challenges and reform processes.
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Anskaffning av försvarsmateriel sker ofta i mångåriga projekt med långa koncept-och utvecklingsfaser som leder till att kostnadsutfallen för anskaffningen ligger långt fram i tiden. Memot diskuterar problemet med att prisökningar i... more
Anskaffning av försvarsmateriel sker ofta i mångåriga projekt med långa koncept-och utvecklingsfaser som leder till att kostnadsutfallen för anskaffningen ligger långt fram i tiden. Memot diskuterar problemet med att prisökningar i försvarssektorn inte kompenseras fullt ut i Sverige och undersöker om Finland och Norge har liknande problem.
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Internationella samarbeten inom materiel- och logistikområdet utgör en viktig del i försvarets materielförsörjning. De senaste åren har en tydlig omsvängning skett mot att samarbeten tydligare ska bidra till Försvarsmaktens operativa... more
Internationella samarbeten inom materiel- och logistikområdet utgör en viktig del
i försvarets materielförsörjning. De senaste åren har en tydlig omsvängning skett
mot att samarbeten tydligare ska bidra till Försvarsmaktens operativa förmåga. Det
förändrade omvärldsläget har också gjort att säkerhetspolitiska hänsyn ska ha
starkare påverkan på inriktning och prioritering av samarbeten. Syftet med denna
studie har två delar: 1. att beskriva koordineringen inom och mellan olika typer av
samarbeten och 2. att diskutera de mål som de olika aktörerna har och vilka
prioriteringar detta kan leda fram till.
i försvarets materielförsörjning. De senaste åren har en tydlig omsvängning skett
mot att samarbeten tydligare ska bidra till Försvarsmaktens operativa förmåga. Det
förändrade omvärldsläget har också gjort att säkerhetspolitiska hänsyn ska ha
starkare påverkan på inriktning och prioritering av samarbeten. Syftet med denna
studie har två delar: 1. att beskriva koordineringen inom och mellan olika typer av
samarbeten och 2. att diskutera de mål som de olika aktörerna har och vilka
prioriteringar detta kan leda fram till.
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Defence procurement is an area where national security goals and economic considerations need to be reconciled. Compromises to the goal conflict are reflected in the institutional framework and government regulations surrounding arms... more
Defence procurement is an area where national security goals and economic considerations need to be reconciled. Compromises to the goal conflict are reflected in the institutional framework and government regulations surrounding arms procurement in a country at a specific time. The objective of the paper is to develop a framework that can be used for comparing and assessing the economic features of procurement systems of different countries. The paper investigates factors affecting the economics of procurement on three levels: the conditions of the defence industry, the overall institutional framework for procurement and the implications of the different types of contracts commonly used in procurement. Finally, the factors that could be used in an empirical comparison between countries are assessed and a preliminary partial approach for an empirical study comparing the procurement systems of France, Russia and Sweden is discussed.
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The purpose of this article is to explore the development of Russian military spending in light of weak and negative growth of the Russian economy and to look at the reasons for the economic decline that has developed after the economic... more
The purpose of this article is to explore the development of Russian military spending in
light of weak and negative growth of the Russian economy and to look at the reasons for
the economic decline that has developed after the economic crisis in 2009 and is due to
long-term internal structural factors that have existed since the mid-2000s. The confidence
crisis resulting from Russia’s aggression against Ukraine 2014,Western sanctions and
falling oil prices has further aggravated these tendencies and the economy is now contracting.
The main conclusions are that the share of the defense budget in GDP has risen
substantially, but there is still a trade-off between defense and other public spending in
the budget. Political reform would be necessary to implement market institutions and revive
the economy.
light of weak and negative growth of the Russian economy and to look at the reasons for
the economic decline that has developed after the economic crisis in 2009 and is due to
long-term internal structural factors that have existed since the mid-2000s. The confidence
crisis resulting from Russia’s aggression against Ukraine 2014,Western sanctions and
falling oil prices has further aggravated these tendencies and the economy is now contracting.
The main conclusions are that the share of the defense budget in GDP has risen
substantially, but there is still a trade-off between defense and other public spending in
the budget. Political reform would be necessary to implement market institutions and revive
the economy.
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The objective of the article is to analyze the economic effects for Russia of pursuing political goals instead of reviving the economy and carrying out necessary reforms. The “non-reform agenda” since the mid-2000s means that for many... more
The objective of the article is to analyze the economic effects for
Russia of pursuing political goals instead of reviving the economy and
carrying out necessary reforms. The “non-reform agenda” since the
mid-2000s means that for many years, the economy has been sliding
due to structural problems and weak institutions. These tendencies
were reinforced with the re-election of President Vladimir Putin for a
third term in 2012 and his economic agenda. Since 2014 the additional
problems of geopolitical tension, low oil prices and economic
sanctions have resulted in the economy contracting. Despite the
depressed economy the leadership keeps military expenditure at a
high level. Import substitution as a means to mitigate the economic
crisis is not convincing.
Key words: Russia, economic decline, political versus economic
goals, institutions, rent addiction, rent management, sanctions, import
substitution.
Russia of pursuing political goals instead of reviving the economy and
carrying out necessary reforms. The “non-reform agenda” since the
mid-2000s means that for many years, the economy has been sliding
due to structural problems and weak institutions. These tendencies
were reinforced with the re-election of President Vladimir Putin for a
third term in 2012 and his economic agenda. Since 2014 the additional
problems of geopolitical tension, low oil prices and economic
sanctions have resulted in the economy contracting. Despite the
depressed economy the leadership keeps military expenditure at a
high level. Import substitution as a means to mitigate the economic
crisis is not convincing.
Key words: Russia, economic decline, political versus economic
goals, institutions, rent addiction, rent management, sanctions, import
substitution.
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The objective of the report is to qualitatively assess the effects of the economic sanctions imposed by the EU and US against Russia following the annexation of Crimea and further activities in eastern Ukraine. This entails investigating... more
The objective of the report is to qualitatively assess the effects of the economic sanctions imposed by the EU and US against Russia following the annexation of Crimea and further activities in eastern Ukraine. This entails investigating how they have performed vis-à-vis the goals of the sanctions: imposing a cost on the Russian economy and contributing to changing Russia’s policies towards Ukraine. The main conclusion of the report is that the targeted economic sanctions of the EU and the US have contributed to imposing a cost on the Russian economy in combination with other factors, but have so far not persuaded Russia to change its behaviour towards Ukraine. Factors that have reinforced the effects of the sanctions are the falling oil price, depreciation of the rouble and weakened terms of trade. The politicised economic system gives advantage to rent-addicted loss-making producers who are loyal to the regime over competitive companies in resource allocation, which is damaging to the country’s economic performance. At the same time the political resource allocation and rent distribution system warrant the survival of the regime and represent threats to the success of the sanctions. The authoritarian nature of the regime and its anti-Western propaganda, which manipulates public perceptions of the conflict issue, make the regime less exposed to the full effects of the economic decline. The West’s political measures that complement the sanction regimes need to address this threat and manage the risks it poses to the Western objectives. The conflict over Ukraine is important for both Russia and the West. In order to resolve it, exit strategies need to minimise the risk of loss of face for both sides.
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The chapter analyses the effects of rent dependence and Putin’s rent redistribution system on small and medium-sized enterprises, ‘the new private sector’ in the Russian economy. The Worldwide Governance Indicators are used to analyse the... more
The chapter analyses the effects of rent dependence and Putin’s rent redistribution system on small and medium-sized enterprises, ‘the new private sector’ in the Russian economy. The Worldwide Governance Indicators are used to analyse the institutions supporting the market economy and it is argued that when a dominant part of the economy is ruled by the management of oil rents to secure the power of the regime, the role of market-oriented institutions becomes limited. The chapter also analyses the effects of the present restrictions on voice and civil society for institutional development and concludes that there is little hope for ‘reform from below’ of the system.
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The article discusses the need for institutional reform in Russia. To restore growth the institutional framework need to be renewed and finally become what it was meant to be: the common rules of the game in economic Russia. However,... more
The article discusses the need for institutional reform in Russia. To restore growth the institutional framework need to be renewed and finally become what it was meant to be: the common rules of the game in economic Russia. However, under the present regime the prospects of such reforms are small.
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What are the characteristics of the Russian economic system and what potential does it have to spur growth? Would strengthening of the institutions underpinning the market economy make a difference? And is there any chance for reform... more
What are the characteristics of the Russian economic system and what potential does it have to spur growth? Would strengthening of the institutions underpinning the market economy make a difference? And is there any chance for reform initiatives from below through democratization? The purpose of the report is to analyse the systemic characteristics of economic development in Russia after 2009 and to assess the potential of the present hybrid economic system to resolve the impediments to future growth based on the improvement of productivity and innovation. Fundamentally this is an investigation of the extent to which the economic system can facilitate a more efficient allocation of resources between sectors, reduce resource waste, increase productivity and strengthen competition by enabling entry of new actors into different markets. The study develops a model based on Gaddy and Ickes (2010) and analyses the effects of rent dependence and Putin’s rent redistribution system on small and medium-sized enterprises, ‘the new private sector’, which has been added to the original model. It is shown that when a dominant part of the economy is ruled by the management of oil rents to secure the power of the regime, the role of market-oriented institutions becomes limited. Weak institutions have a background in the democracy shortage in Russia which is reflected in weak channels of ‘voice’ for citizens and organisations to express their opinion. The report analyses the effects of the present restrictions on voice and civil society development and concludes that there is little hope for ‘reform from below’ of the system. The confidence crises caused by the Ukrainian crisis of 2014 further aggravate Russia’s problems of restoring growth.
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The paper reviews theories that explain the role of civil society and its different functions. It investigates empirical methods and indices that asses the status and strength of civil society in a comparative perspective with the help of... more
The paper reviews theories that explain the role of civil society and its different functions. It investigates empirical methods and indices that asses the status and strength of civil society in a comparative perspective with the help of international indices. Based on these findings the possibility of analysing the role of civil society for economic development is discussed. JEL classification: O17; P2
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The Russian federal budget 2013-2015 shows a marked increase in the budget item “national defence”. Instead of a GDP-share of 2.7 per cent as in the 2000s, the defence budget is planned to increase to over 3.5 per cent of GDP during... more
The Russian federal budget 2013-2015 shows a marked increase in the budget
item “national defence”. Instead of a GDP-share of 2.7 per cent as in the 2000s,
the defence budget is planned to increase to over 3.5 per cent of GDP during the
first half of the 2010s. With SIPRI’s definition of military expenditure this level
of the Russian defence budget corresponds to a rise in Russia’s total military
expenditure from around 3.5 to over 4.5 per cent. The main reason for this
increase is the reform of the Armed Forces and serious attempt to give them a
“new look” by modernizing their weaponry. The State Armament Programme
2020 is supposed to result in 70 per cent of modern arms in the Armed Forces by
2020. Since 2012, however, the expected growth of the Russian economy is
declining to 2-3 per cent per year and the question arises whether Russia will be
able to maintain the high planned level of military spending and achieve this goal.
Strong emphasis is put on the national defence industry as a driver of innovation
and growth in the new economic strategy, but the past performance of the defence
industry raises doubts regarding the successful fulfilment of the aims of the
armament programme.
Keywords: Russia, federal budget, military spending, armament programme, arms
item “national defence”. Instead of a GDP-share of 2.7 per cent as in the 2000s,
the defence budget is planned to increase to over 3.5 per cent of GDP during the
first half of the 2010s. With SIPRI’s definition of military expenditure this level
of the Russian defence budget corresponds to a rise in Russia’s total military
expenditure from around 3.5 to over 4.5 per cent. The main reason for this
increase is the reform of the Armed Forces and serious attempt to give them a
“new look” by modernizing their weaponry. The State Armament Programme
2020 is supposed to result in 70 per cent of modern arms in the Armed Forces by
2020. Since 2012, however, the expected growth of the Russian economy is
declining to 2-3 per cent per year and the question arises whether Russia will be
able to maintain the high planned level of military spending and achieve this goal.
Strong emphasis is put on the national defence industry as a driver of innovation
and growth in the new economic strategy, but the past performance of the defence
industry raises doubts regarding the successful fulfilment of the aims of the
armament programme.
Keywords: Russia, federal budget, military spending, armament programme, arms
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Ryssland och EU framtida energisamarbete
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The Western sanctions against Russia. How do they work? Susanne Oxenstierna The West's economic sanctions imposed against Russia in the wake of the Kremlin's annexation of Crimea in 2014 have now been in place for almost five years. The... more
The Western sanctions against Russia. How do they work? Susanne Oxenstierna The West's economic sanctions imposed against Russia in the wake of the Kremlin's annexation of Crimea in 2014 have now been in place for almost five years. The objective of the sanctions is to pressure Russia to change its policies. Economic sanctions are widely used instruments in international policies for signaling countries that their behavior violates international norms. Are they effective? This chapter analyses how the EU and US sanctions imposed on Russia in 2014-18 have affected the Russian economy and its policies towards Ukraine. The analysis is qualitative focusing on probable ways that sanctions may have affected the Russia economy and Russia's policies towards Ukraine. The first section of the chapter presents the analytical framework for assessing sanction effects. The second section provides an overview EU and US sanctions. The third section discusses how sanctions may have affected the Russian economy. The fourth section analyses potential political effects. A conclusion summarizes the results.
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The paper reviews theories that explain the role of civil society and its different functions. It investigates empirical methods and indices that asses the status and strength of civil society in a comparative perspective with the help of... more
The paper reviews theories that explain the role of civil society and its different functions. It investigates empirical methods and indices that asses the status and strength of civil society in a comparative perspective with the help of international indices. Based on these findings the possibility of analysing the role of civil society for economic development is discussed. JEL classification: O17; P27.
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Russia's economic modernization The purpose of this article is to analyse Russia's ongoing modernization and assess its potential for reviving the economy. The modernization launched by President Dmitrii Medvedev in 2009... more
Russia's economic modernization The purpose of this article is to analyse Russia's ongoing modernization and assess its potential for reviving the economy. The modernization launched by President Dmitrii Medvedev in 2009 represents an extension of the economic reforms that had been discontinued after 2004. The article identifies the main problems modernization needs to address and investigates proposed measures. Focus is on the economic-institutional aspects of the modernization programme and the structural problems of the economy. The main findings are that the modernization policy is based on a thorough analysis of the structural problems of the economy and contains a long list of reasonable proposals , but that it is based on a top-down approach, that many problems require political reform rather than economic, and that insufficient attention is given to creating good conditions for expansion and innovation among small and medium-sized enterprises (SME). In addition it is...
The Russian federal budget 2013-2015 shows a marked increase in the budget item "national defence". Instead of a GDP-share of 2.7 per cent as in the 2000s, the defence budget is planned to increase to over 3.5 per cent of GDP... more
The Russian federal budget 2013-2015 shows a marked increase in the budget item "national defence". Instead of a GDP-share of 2.7 per cent as in the 2000s, the defence budget is planned to increase to over 3.5 per cent of GDP during the first half of the 2010s. With SIPRI's definition of military expenditure this level of the Russian defence budget corresponds to a rise in Russia's total military expenditure from around 3.5 to over 4.5 per cent. The main reason for this increase is the reform of the Armed Forces and serious attempt to give them a "new look" by modernizing their weaponry. The State Armament Programme 2020 is supposed to result in 70 per cent of modern arms in the Armed Forces by 2020. Since 2012, however, the expected growth of the Russian economy is declining to 2-3 per cent per year and the question arises whether Russia will be able to maintain the high planned level of military spending and achieve this goal. Strong emphasis is put on ...
